Key economic issues including the energy sector, unresolved privatisations and the future of duty-free shops dominated a weekend gathering of senior leaders of the parties in the tripartite coalition Government.

Prime Minister and leader of Bulgarian Socialist Party Sergei Stanishev signalled acceptance of a call in the European Commission’s February 4 interim report on Bulgaria for the closure of the duty-free shops and fuel stations at the external borders with Turkey and Serbia.

The EC called these duty-free shops “a focal point for local corruption and organised crime”. 

The shops will be closed, Stanishev told journalists during the February 9-10 meeting in the spa resort city of Hisarya.

The other political news from Hisarya was a formal rejection of media reports in recent weeks that had claimed that there would be a Cabinet reshuffle. The media reports had claimed the ministers facing dismissal were all from the quota of the National Movement for Stability and Progress (NMSP): Education Minister Daniel Vulchev, Defence Minister Vesselin Bliznakov and State Administration Minister Nikolai Vassilev.

Together with the leaders of the other two parties in the coalition, the NMSP’s Simeon Saxe-Coburg and Ahmed Dogan of the Movement for Rights and Freedoms (MRF), Stanishev said that a Bulgarian energy holding is to be created. The holding will made up of the country’s five largest energy companies, natural gas distributor Bulgargaz, the National Electric Company (NEK), the Kozloduy nuclear power plant, the Maritza-Iztok II Thermal Power Plant, and the Mini Maritza Iztok (Maritza Iztok mines). Combined, the assets of the five companies should amount to four billion euro and an annual profit of 1.8 billion euro. According to Stanishev, the energy giant should become a fact by the end of the year.

A year and a half before the next regular elections for Parliament, the Government’s priorities will include the sale of state-owned tobacco giant Bulgartabac. The issue of selling Bulgartabac has been a problem carefully avoided by this and the previous government because of the MRF stance. Tobacco is grown in regions populated mostly by Muslim Bulgarians – the hard core of MRF supporters – and the MRF has always asked for guarantees that these people will not be left out on the streets after the sale of Bulgartabac. With Dogan next to him, Stanishev told a news conference in Hisarya that Bulgartabac was to be sold. Another state-owned company to be sold is Sofia heating utility Toplofikatsia, whose two previous bosses are the subject of corruption allegations. The coalition said that the health care system would be reformed once again but this time the key word is “liberalisation”.  The project includes the introduction of alternative financing of the health care system mixed with mandatory contributions to private medical insurance funds, instead of the current situation when all contributions go to the state-owned National Medical Insurance Fund (NMIF). It is yet to be decided exactly how private funds would join the medical insurance system and how many of them would be allowed to join. What is certain, however, is that a guarantee fund is to be established to ensure financial stability in health care and access for all social groups, including children, retirees and high-risk groups.

A day after the meeting in Hisarya, reactions started coming, and not all positive. At a round table on the electricity market organised by the Bulgarian Industrial Association, experts shared the opinion that consolidating state-owned energy companies into a holding group would not resolve the problems in the energy sector, and could aggravate these problems by creating a more complex hierarchy of management.