Dribbling along the populist playground
The elections are over but PM Boyko Borissov’s flair for populist ideas bordering the dangerously disruptive is as busy as ever. One would think the immediate weeks after the elections would tone down the most outrageous undertakings. But the main parties in Parliament keep at it all the same.
On one of the two days Movements for Rights and Freedoms (DPS) MP Delyan Peevski stepped foot in Parliament, he said his party was contemplating a bill to lower VAT on bread and make kindergartens free of charge. It might sound terribly inadequate for a number of reasons, but also – surely the news focused more on it for the mere fact that Peevski delivered the message, rather than the actual substance of the statement. Peevski is so rarely seen at all, let alone recorded by the media, that one could expect his quote on the weather to get more coverage than a story of actual substance or consequence.
But regardless of the coverage, on the surface it still seemed relatively harmless: the enigmatic Peevski, a media mogul, the notorious face of Bulgaria as a captured state, sets foot in his place of work for the third time in two years, and makes an unbidding promise, which might be ridiculous, but whose realization is questionable at best. And even if an effort is made, it will be sometime in the future.
Peevski retreated back to his residence in Dubai, and if the past is any indication, we won’t be hearing from him directly anytime soon. At least not before the next elections in the fall. But all the other politicians are here and they seem to have taken a liking to Peevski’s statements, deciding to bend over backwards to try and top them off.
The Bulgarian Socialist Party was first to hop on the populist marry-go-round. VAT on bread is not enough, they said, and moved to expand the scope of everyday goods that would have a lower VAT to include meat, milk, flour, and flour products. After BSP decidedly lost the last elections, and most of the credit for that loss should go to BSP’s campaign messages, which were entirely deprived of policy reflection, BSP may be felt the need to take the floor and demonstrate political engagement. This extraordinary political vision of the future by BSP might have been enough for its acting leader (who resigned after the elections) Korneliya Ninova, but to anyone else it is laughable.
But then again, indeed, BSP’s idea for left-wing policy does not expand much further than lowering taxes for a few goods, which do not need it anyway. Granted, it appeals to the base. The price of bread, for historical reasons, is a catch-all metaphor for the state of the economy in general and especially inflation and consumer capacity. But this is not the case today. Peevski deciding to drop a populist bomb on the public just before leaving for Dubai is understandable, be it nonimaginative. But Ninova, who might very well believe this to be a good authentically left-wing idea, worthy of redeeming her from opposing the Istanbul Convention and vocal defense of “traditional Bulgarian values”, is utterly sad. Apart from that, BSP’s political vision collapses beyond the mantra that GERB are villains.
Things are not too different at the opposite side of the isle. GERB is just as helpless when it comes to policy vision as their primary opposition. Just as PM Boyko Borissov took the floor to slash the idea of lowering the VAT on the goods BSP and DPS were dribbling on, and one might have expected for the whole case to be closed, he dismissed their ideas as populistic but himself proposed to remove VAT on books altogether. Which apparently is in no way affiliated with populist proposals. The debate was lifted up to a value-orientated analysis: DPS and BSP only care about what they put in their mouths (literally), while GERB is concerned with higher values: education and intellectual development. Also, Borissov added in his typical all-knowing and all-powerful demeanor, what’s the VAT on books, a droplet in the sea.
A typical characteristic of societies, which are well adjusted, functional, fair and prospering is that they don’t bother much with politics, and where they do, they focus on minor problems. The cliché goes that low interest in politics and lack of much opposing debate on relevant issues mean an absence of a crisis. But what if the crisis is not a crisis in the sense that it is a turning point, and full of dynamics? A kind of a crisis on repeat, which never gets anywhere in particular but runs in circles.
Then what we have is never-ending debates, which lead to nothing in particular, and are careful not to address any real issues. Ninova and Borissov will be more than happy to debate whether VAT on books or basic foods is worse. Because this is not a real issue, and one situated at a more-than-safe distance away from risky subjects like the judicial system reform, systematic corruption, press freedom, using law enforcement and judiciary as a political tool to silence opposers, just to name a few. But it does a very good job of flooding the news cycle with nonsense.
While this was going on, this fundamental debate over tax policy, Borissov did manage to do something that has the potential of substantial consequences. He managed to introduce a bill to Parliament to lower the parties’ state subsidy from 11 leva per vote to 1 lev per vote. The bill zoomed through its first reading in Parliament and if it passes its second it will dramatically jeopardize the way the political parties function, especially the smaller ones. But more importantly, it will make them all the more susceptible to accepting funding from shady businesses, as if this was not problem enough as it is.
It makes you wonder at the end, isn’t it better for Borissov to just stick to playing soccer and circling the country with his jeep, high on the nation’s unabating love.
In other news:
NOVA TV is changing its contracts with investigative journalists
The new management of NOVA TV has presented three of its investigative journalists with a choice: to end their normal labor contracts and work for the media as freelancers, or stop working for them altogether, ClubZ reported.
According to reports, the journalists in question, Genka Shikerova, Miroliuba Benatova and Marin Nikolaev were called up to a manager’s office with the proposal to exchange their labor contracts with the so-called civil contracts, which essentially makes them external to the media freelancers. They would have to produce their stories and pitch them to the editors. NOVA TV’s management reportedly maintains that this way the journalists will have total freedom over three material they produce.
However, labor contracts (and protections under labor law, social security etc.) hardly has anything to do with their freedom to produce material. But what is essential in this case is that if they are not employees of the media organization, in this case – NOVA TV, they will not have its protection in their investigations. In other words, they will have zero institutional support in conducting their work (save, maybe, technical support).
This is the consecutive instance of what looks like a crude cleansing of NOVA TV, after it was acquired by the infamous Domuschiev brothers. Over the past weeks many of the news staff of the network either quit or were let go. Meanwhile, one of NOVA Broadcastig Group’s outlets, NETINFO was in the center of attention last week when its executive director, Hristo Hristov took to Facebook to reveal that since the new management took over, there has been ‘unprecedented pressure’ over the editorial policy of NETINFO sites, including the leading Bulgarian sport news outlets Gong.bg; as a result the whole of Gong’s key editorial staff quit and Hristov’s executive powers have been suspended.
The Netherlands is against Bulgaria entering Schengen due to high corruption
The Netherlands is still against Bulgarian accession to Schendgen because of the high corruption in the country and human trafficking. Dutch Foreign Minister Stef Blok was on a visit to Sofia this week when he said bluntly that “there needs to be more progress in the fight against corruption and a stricter system.”
“I was shown numerous pictures of border guards, but there is another issue – how you handle corruption and what is the approach to human trafficking. And I think further progress is needed there”, Blok said.
The Netherlands is one of the several countries, along with Germany and France, which block Bulgaria and Romania’s from entering the Schengen zone.
“We have heard your desire to join Schengen, but I hope you understand that the people of the Netherlands know about the large number of migrants who arrive in our country, we have to make sure the border control is uncompromising before we allow Bulgaria to Schengen,” Minister Blok said.
Wife of a Russian bank vice president possesses Bulgarian citizenship illegally
Galina Ulyutina has received Bulgarian citizenship illegally, Svobodna Evropa (Free Europe) reports. Ulyutina is the wife of Yuriy Solovyov, the vice president of the Russian bank Vneshtobank (VTB). According to Svobodna Evropa’s reporting Ulyutina is one of eight foreigners and non-EU nationals, who have received Bulgarian citizenship and failing to fulfill one of the legal requirements for it – to make an investment in the country.
Another requirement to receive a Bulgarian passport is for the individual in question not to have past convictions. But it turned out, by the State Agency for National Security’s own account, that SANS is unable to confirm whether or not someone has been convicted of a crime in the past. The issue emerged a while ago when the story of another illegitimate recipient of a Bulgarian citizenship, the Russian billionaire Sergey Adoniev. Adoniev’s conviction is not only public knowledge, but rather well-known. When this was discovered and SANS were asked about it, the agency admitted it has no way of knowing a person’s legal past.
Back in November, 2018 reports emerged that the Bulgarian State Agency for Bulgarians Abroad were dealing illegally with Bulgarian passports. This led PM Boyko Borissov to appoint a special inquiry by SANS, to check 40’000 people with secondary Bulgarian citizenship. The investigations came up with these eight violations a month ago, but no real action has been taken to cancel these citizenships, except stalling: just before the issue was brought to the final stage – the Presidency, where the actual order should come from – SANS decided to reassess its on conclusion and reopened the cases.
European Commission criticizes Bulgaria for failing to convict politicians and stop money laundering
Brussels hardened its tone toward Bulgaria in its latest report on the economy of the country. The document states that unless Bulgaria fulfills the recommendations in the report it might face a renegotiation process for access to the EU funds.
Earlier this year the commission issued its report on macroeconomic disbalances, where it also pointed to the problem of money laundering in the country, be it not as directly. But the commission did imply that a considerable share of the suspicious transactions, which financial institutions had reported to the State Agency for National Security last year involved Bulgarian politicians or local political organizations, but that those instances never get investigated.
The report also issued recommendations, whose goal was to tackle this apparent deficiency but those have not been addressed to date.
These new recommendations, which again focus on money laundering and – by extension - corruption – put a clear emphasis on the problem and lack of response on the part of Bulgarian authorities.
The risk of corruption needs to be better addressed, as it is a predicate offence to money laundering. The Bulgarian authorities will need to show concrete results and build a track record evidenced by final decisions in high level corruption cases.
Another main concern remains the management of state-owned companies and infrastructure investment.
State-owned enterprises suffer from weak corporate governance, which is also to a large extent reflected in their economic performance. The document acknowledges, though, that legislative reform in cooperation with the Organization for Economic Cooperation and Development is underway.
As for infrastructure, the report asserts that the sector “suffers from major investment gaps” and that the quality and coverage of the roads remain below the EU average.
Moody’s downgrades First Investment Bank rating
The international rating institution Moody’s has downgraded FIB’s long-term deposit rating from B1 to B2, the agency reported June 4. Moody’s maintains a stable outlook in the long term, however, thanks to the overall expectation that Bulgaria’s operating environment will improve, which will balance out the risks, which Moody’s has identified.
The chief reason for the downgrade is the large number of non-preforming loans. The agency asserts that those pose a risk to the bank’s capital base.
“Moody's considers that the risk to the bank's capital from its stock of problem loans not covered by provisions, along with the exit risk from the bank's significant real estate portfolio, remains high”, reads Moody’s press release following the downgrade
Another circumstance of FIB, which Moody’s assesses as a risk is the fact that the bank’s ownership is concentrated between two persons, Tseko Minev and Ivaylo Mutavchiev, who own 42% of the bank’s assets.
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