site.btaUPDATED Business Meets Government at Annual Meeting in Sofia on Tuesday

The 16th Annual Business Meeting with the Government, organized by Capital weekly, is taking place at Sofia Tech Park on Tuesday. The event is being live-streamed. The focus of the meeting is the crisis in Ukraine and its ramifications for Europe and Bulgaria.

The invited speakers include Prime Minister Kiril Petkov, eight government ministers, Energy and Water Regulatory Commission Chair Stanislav Todorov, and political scientist Ivan Krastev.

Prime Minister Kiril Petkov

Bulgaria and Europe are at a difficult moment. We must draw a distinction between our fondness for Russia and the Putin regime. These are two different things. Bulgarians should reject dictatorship and the war and should realize the advantages of being a part of the EU and NATO. The truth is that [the power-sharing] Bulgarian Socialist Party backed the measures against Russia. This is far more difficult for them, but they differentiated the love for Russia that a large part of their constituents feel from the sanctions on account of the war. We all hope that if the military conflict in Ukraine is de-escalated, gas prices can normalize at least a bit.

Having given up large quantities of cheap natural gas from Azerbaijan is an unforgivable mistake. The Government will keep up its efforts to cushion the blow of the price hike to business and households.

[European Commission President] Ursula von der Leyen has confirmed that she will come to Bulgaria in a couple of weeks' time, and we will sign the Recovery and Resilience Plan.

We are trying to use the crisis in Ukraine as an opportunity. Next week we will talk to an IT company about the options to transfer to Bulgaria at least part of their 2,000-plus programmers in Russia and Ukraine. 

Finance Minister Assen Vassilev

The first thing we did even before the war broke out was to make a plan in case natural gas and oil supplies stopped. We are working on even worse-case scenarios, with the conflict expanding to, say, Moldova, and with a smaller or no wheat harvest in Eastern Europe. Ukraine will obviously have no harvest. We have already addressed the issue in Bulgaria by purchasing the grain that is stored in the country.

The Russian market is disappearing for a huge part of the world. The Russian central bank was surprised by the blocking of a large part of Russia's forex reserves. Asking counterparties to pay in roubles, given that the contracts set payments in dollars or euro, is non-performance of the contracts.

Fuel, metal and food prices will obviously push inflation up. The impact on economic growth is unclear because we will lose the markets of Russia and Ukraine but goods that we have so far imported from those two countries are substituted by supplies from Europe.

More than half of the refugees who arrive here are children, and this requires a lot of care and resources. For the time being, we are covering these costs from the national budget, but sooner or later a Pan-European Aid Package will be needed. There is already talk of joint European gas and oil purchases and contracts and a policy synchronized at EU level. We must take the opportunity to help each other, to come up with a single position on external markets rather than compete and puff up prices. The European leaders are firmly intended to reduce fast the dependence on raw materials from Russia, but this should be achieved without the economy collapsing. I expect a solid alternative base for the European economy within two or three years.

Energy Minister Alexander Nikolov

Specific alternatives for natural gas supply are available, and all possible scenarios for the future, starting as early as 2023, are under consideration. Thanks to its geographic location, Bulgaria can use quite a few alternative natgas routes, and its infrastructure can handle supplies from all neighbouring countries, including liquefied natural gas (LNG) from Turkey and Greece. LNG transmission is expensive, which stands in the way of concrete economic solutions. Talks are underway with Romania and Greece on shared supplies so as to cut these costs. The prospects of LNG purchases were discussed with the US, too.

Bulgaria's long-term contract on natural gas delivery with Gazpromexport, which is in effect until the end of 2022, is being performed without any violations. Despite an annex to the contract with Azerbaijan by which Bulgaria gave up a large quantity of the gas from that source, Bulgaria is trying to make full use of this option. The full 1 billion cu m contracted with Azerbaijan can meet some 30 per cent of domestic demand. For the time being, there are no indications that the launch of the Interconnector Greece-Bulgaria in commercial operation will be delayed, and this infrastructure will by all means be used actively during the next heating season.

Bulgaria is perfectly positioned to be among the countries leading the way to the replacement of natural gas by hydrogen as an energy source: local companies are technologically capable of this, and the country is rich in water resources.

Environment and Water Minister Borislav Sandov

Biogas has a relatively small potential and cannot replace the natural gas from Russia. Alternative solutions need to be found. The potential of photovoltaics should be developed, and Parliament should amend legislation to ease conditions for rooftop solar power systems. The Maritsa East minefields, disused stone quarries and other industrial facilities can also be used for a very fast implementation of such projects. Agricultural land first, and NATURA 2000 sites later, too, could be considered for harnessing renewable energy sources.

Between 40 and 50 million leva are planned for an improvement of the flood risk response systems. 

e-Government Minister Bozhidar Bozhanov

We are not in a state of cyber war, and the cyber activity background is not heightened. Bulgaria has long failed to do what is necessary to maximize its cyber protection, which is why the present Government must rush to catch up on certain deficiencies.

The more critical institutions, which are more important and have more registries, are better protected. A case in point is the National Revenue Agency, where information security is at a satisfactory level. On the other hand, municipalities are less protected. Bulgaria has blocked 45,000 IP addresses from Russia.

Bulgaria is a front-line country in the disinformation campaign, and we will insist on the inclusion of our ideas and proposals for regulation of recommender systems in the EU regulations. Neither Facebook nor any government can tell us what is truth and what is not. 

The Government will keep building the digital identity system, which is the start of e-government. E-government cannot kick off without citizens having a free-of-charge, easy-to-use means of identifying themselves at any location.

Justice Minister Nadezhda Yordanova

Justice Minister Yordanova said that the judicial system reform is in a completely new context. On the one hand, the lack of reform in the Bulgarian judicial system will directly reflect on the access to EU funds, precisely the fact that the National Recovery and Resilience Plan is directly tied to a few key reforms in the judiciary and the current crisis, which shows how corruption directly impacts national security, she said during the meeting. 

According to her, the main problem with the Judiciary is that the feeling of justice is lacking among the Bulgarian people and business. "One of the reasons for this is that we do not have an efficient prosecuting magistracy," she added, noting that certain high-profile crimes are either not being investigated or "put on hold". Yordanova said that the institution of the prosecutor general is at the top of this pyramid and there is no effective control to investigate and hold responsible this institution. The Justice Minister noted that the creation of a mechanism to investigate the Prosecutor General is included in the Recovery and Resilience Plan and work on certain provisions is underway. 

It is realistic to close the specialized courts and prosecution offices within the coming months to a year. 

Transport and Communications Minister Nikolay Sabev

There are already problems in the supply chains. Many insurers refuse to be responsible, through their policies ship loads in the Black Sea, Sabev said. "That is precisely why in the past couple of weeks or so we have been actively working on alternative supply chains," he said, adding that one of the possible options is for maritime transport to have another final destination, such as Greece, for example.  

The events in Ukraine showed that the Government's strategy to open more transport connections and improve Bulgaria's connectivity with neighbouring countries was correct, Sabev said, giving as an example the upcoming renewal of the ferry between Bulgaria and Romania in the city of Ruse, which is expected to start operating this July and relieve traffic along Danube Bridge. 

Regional Development and Public Works Minister Grozdan Karadjov 

Commenting the price increase of construction materials, Karadjov recalled that their prices have started going up last February due to supply chain disruptions. That is why the State is faced with the question of what to do with the EU programmes that finance construction works and with the contracts signed for the period 2019-2020, whose prices are no longer relevant. "There are two black holes - one is projects under which contracts have been concluded, but the builders refuse to work, as objectively they cannot, and the other one is the submitted offers without contracts, which were refused to be signed and the offers were withdrawn," he commented the rapid price increases. The Regional Development Minister said that an interdepartmental working group has been created in January to work in adjusting prices in the construction sector. 

Energy regulator chief Stanislav Todorov

The Energy and Water Regulatory Commission (EWRC) is drawing up an opinion on legislative amendments and changes in technical requirements so as to speed up and ease as much as possible the connection to the grid of photovoltaic plants for self-consumption. The Commission will prepare opinions on the development of conventional and alternative energy sources. EWRC will be the motor of the efforts of both the Government and business to carry out the transformation of the electricity market.

The situation in which the State controls 80 per cent of the electricity production is a thing of the past. Let us work together with the Bulgarian business community for the adoption of the necessary changes or initiatives so as to streamline the regulation.

Political scientist Ivan Krastev

This war completely wrecked the relations between Russians and Ukrainians. Staying neutral in this conflict is illusory. Another illusion that the crisis has shattered is that war is impossible as long as you have a well-established trade relationship with somebody. At a time of a conflict, your mutual dependence is your vulnerability. Europe has changed dramatically in economic terms. As long as Putin is Russia's President, the sanctions against that country will not be lifted. Bulgaria's major problem is the high level of public mistrust, which turns into a military factor during a war and could be instrumentalized.