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And it's goodbye from him

Bulgaria’s battered and unloved government formally resigned on July 24, its reputation shaken by its policies and alleged murky business links – and, more recently, a banking crisis. With snap elections looming in October, a caretaker government will now seek to steady the ship and repair relations with the European Union. The election is expected to usher in the nominally rightist opposition with the hope it will take a more reform-minded and western-looking approach. Continue reading »

Bulgaria’s under-fire central bank has turned to the European Central Bank to oversee the country’s financial system days after it announced that it would allow the country’s fourth-biggest lender to collapse.

Bulgaria’s banking system as a whole remains well-capitalised. But the Bulgarian National Bank’s decision to enter talks with the ECB about joining the joining the European Single Supervisory Mechanism (SSM), even though Bulgaria is not in the eurozone, is an admission of draining confidence in the country’s financial and political authorities. Continue reading »

Bulgaria’s central bank issued a dramatically-worded statement on Friday warning of “an attempt to destabilise the state through an organised attack against Bulgarian banks” after the country saw its second bank run in a week.

While the banking sector as a whole is well-capitalised, the manner in which two major financial institutions have been hit raises serious concerns about the country and poses risks to its economy. Continue reading »

Controversial Bulgarian tycoon Tzvetan Vassilev blamed Sofia’s state prosecution service and media attacks for sparking a run on his Corporate Commercial Bank (KTB) as shareholders declined to rescue the country’s fourth largest lender, raising the prospect of nationalisation.

Speaking to beyondbrics, Vassilev said the run on KTB last week was “triggered by absurd speculations of certain factions of the Bulgarian prosecution service, which were blown out of proportion by Bulgarian media”. The run came after a controversial MP, Delyan Peevski, accused Vassilev of ordering his assassination, following which the state prosecutor detained three of Vassilev’s associates. Continue reading »

Bulgaria’s central bank on Friday froze the operations of the Corporate Commercial Bank (KTB), suspended its directors and put the country’s fourth largest lender under special supervision following a bank run that had raised risks of insolvency.

Tsvetan Vassilev, KTB’s largest shareholder and one of Bulgaria’s wealthiest and most influential figures, said in a statement to the FT late on Friday that “the events that have been taking place since last week are the visible part of a carefully prepared and planned scenario aimed at destabilizing Corporate Commercial Bank”.

Vassilev did not say who he believed was behind the alleged attempt to destabilise KTB, but he did say that “more than 20 per cent of the financial institution’s assets were withdrawn in less than a week”. This, he added, would “have made any bank collapse within two or three days” but KTB had been able to withstand it, proving its “outstanding management”. Continue reading »

Bulgaria will hold an early election in the autumn, with the beleaguered government set to step down after barely a year in power characterised by street protests, accusations of links to nefarious business interests and strong criticism from the European Union.

President Rosen Plevneliev said on Tuesday that the country’s leading political parties had agreed to an election between September 28 and October 12. It comes after a junior coalition partner withdrew from the government led by the Bulgarian Socialist Party (BSP), which suffered a damaging defeat in the European elections. Continue reading »

European advocates of shale gas – and they do exist – have been hoping that the Ukraine crisis might galvanise governments into dropping objections to controversial fracking. But despite a growing and belated recognition that Europe must do more to diversify its energy sources, in Bulgaria at least the unpopular shale movement is going backwards.

Last month, US energy giant Chevron quietly closed its Sofia office, three years after it was awarded a licence for shale exploration that was scrapped months later. The company did not publicise its withdrawal and it has gone largely unreported. But the move is indicative both of the political challenges that frackers still face and of Bulgaria’s frustratingly inconsistent treatment of energy investors. Continue reading »

When is a pipeline not a pipeline? When it’s a highly-controversial Russian energy project that would cut Ukraine out of the European gas supply equation – at least according to Bulgaria’s parliament.

The EU member state is at loggerheads with the European Commission, the EU’s executive body, over the South Stream gas pipeline that would carry Russian gas from Bulgaria through Serbia to central Europe and Italy. Continue reading »

Bulgaria’s government has been besieged by protesters for six months, and oversees an economy that has averaged growth of just 1 per cent since 2010. Those were the main factors behind Standard & Poor’s recent decision to revise its outlook for the country to “negative” from “stable”.

The change may be unwelcome, but merely reflects the difficult economic and political situation. Will it affect Bulgaria’s fledgling recovery? Continue reading »

Hollywood, Bollywood, Nigeria’s Nollywood; France’s arthouse cinema scene, British romcoms, Italian and Russian film from the likes of Fellini and Tarkovsky; the Korean Wave. The cinema culture of south eastern Europe may be rather less celebrated outside the region than those of its more famous peers, but there is growing recognition both of a resurgent home-grown movie scene and the competitive advantages of SEE as a location for shoots. Continue reading »

The government besieged, protesters and police packing the streets, an ongoing air of uncertainty over the country’s future – name the country. Not Turkey, or Egypt, but Bulgaria. But while demonstrators rage against the newly-appointed prime minister, the Balkan country has received a remarkably upbeat report from the International Monetary Fund, which praised the country’s economic stability and policies.

At the end of a regular staff visit on July 3, Michele Shannon, IMF Mission Chief for Bulgaria issued a statement that may give a fledgling, fragile and beleaguered government some succour. Continue reading »

Bulgaria’s Danubeside city of Vidin has a somewhat forlorn air. The great grey river slinks slowly by a long waterfront of panel blocks gazing across the water to the forests of Romania. Among the cracked pavements, despoiled Communist monuments and boarded-up shops, there are, however, a few glimmers of a noble past: an old quarter with some charm, and the stout fortress of Baba Vida, which stands on ancient foundations. The fortress and the elegant gateway to the old city – the Stambul Kapiya, or Istanbul gate – remind the visitor that this was once an important centre in a European network of empire and trade. Continue reading »

Five hundred years of Ottoman rule, 45 years of Communism and the past two decades of democracy tainted by corruption and economic failure have given Bulgarians a substantial dose of disrespect for their rulers. The latest government, which tiptoed over the line into office in a parliamentary vote on Wednesday, presides over a country that is as sceptical – even cynical – as ever. It also faces a sluggish, if stable, economy with the EU’s lowest incomes. Continue reading »

Bad GDP figures from the eurozone on Wednesday but there’s a pleasant surprise from an unexpected quarter: Hungary’s economy contracted by only 0.9 percent in annual terms in the first three months.

Doesn’t sound like good news. But investors had been expecting a drop of as much as 1.4 per cent. With hopes of further improvement in the rest of 2013 buoying the Budapest market, the forint gained 1 per cent against the euro. Continue reading »

In an election marred by allegations of poll-rigging and vote-buying, Bulgaria’s former ruling GERB party came out on top. But it is far from clear who will form the government once the dust settles. Two possible scenarios are a coalition between GERB and ultranationalists that would cause disquiet in Europe, or a return to power of two opposition parties still regarded with suspicion by many Bulgarians. Continue reading »