AGP Executive Report

Migration Policy Shockwaves: EU’s Migration Pact kicked in June 12, but the rollout is already sparking street protests and fresh political heat across Europe, as critics argue it won’t stop irregular arrivals while supporters say it will streamline asylum and returns. Security & Public Trust: US War Secretary Pete Hegseth warned Europe faces a migration “invasion,” while a Reuters-based poll shows only 11% of Europeans now see the US as an ally—fueling debate on defense and reliance. Roads for Summer Tourism: Bulgaria’s regional development minister says Black Sea road repairs will be finished within two weeks, aiming to avoid major disruption for July-August travel. Tobacco Rural Impact: Over 8,300 Bulgarian tobacco growers urged the European Commission to assess how revised EU tobacco rules could affect rural jobs and also avoid expanding illicit trade. Energy Diplomacy: Bulgaria’s energy minister met Azerbaijan’s ambassador to discuss a Caspian-to-Europe green energy corridor and potential gas supply and investment links. State Sector Pay Reform: An MP called for ending automatic executive pay hikes in state-owned firms tied to the minimum wage, arguing it outpaces pay for frontline staff. EU Fiscal Pressure: Finance Minister Galab Donev briefed ECOFIN on Bulgaria’s fiscal situation and the push for fiscal consolidation ahead of the 2026 budget. Business & Digital Use: Eurostat data shows Cyprus leads EU social media adoption, while Bulgaria sits among the lowest—highlighting a gap for Bulgarian firms.

EU Migration Pact: The EU Migration Pact entered into force on June 12, aiming for faster, more uniform asylum and return rules across member states—but critics say it won’t stop irregular migration and will keep fueling political fights. Bulgaria’s Fiscal Pressure: Bulgaria may face an Excessive Deficit Procedure, with the EC citing a 3.5% deficit in 2025 and expected breaches through 2027, while Finance Minister Galab Donev briefs ECOFIN on consolidation plans. Energy Transition & Maritsa East: Local officials, business and unions are clashing over plans to separate Maritsa Iztok Mines and TPP Maritsa Iztok 2 from BEH; unions warn of legal and funding risks, while Stara Zagora pushes for a long-term energy strategy. Fuel Prices: Bulgaria’s petrol and diesel prices have been sliding for a week as markets watch hopes for US-Iran de-escalation. Competition Watchdog: The Commission on Protection of Competition is probing whether retail chains pressured fruit and veg suppliers under the “Care Basket” initiative. Regional Business Links: The 5th Balkan Business Forum in Bansko highlighted Türkiye as a key trade and investment partner, with border infrastructure upgrades also on the agenda. Defence & Compliance: Parliament hears the An-30 overhaul contract extended to Aug 2, 2026, and Bulgaria continues exercises to boost NATO interoperability. BNB Commemorative Coin: President Iliana Iotova backs the BNB’s commemorative euro coin project for the Bulgarian alphabet amid ongoing EU-related approval discussions.

Energy Transition & Industry: Bulgarian mining unions Podkrepa and CITUB/CITUB slammed the government’s plan to separate Maritsa Iztok Mines and TPP Maritsa Iztok 2 from Bulgarian Energy Holding, calling it unlawful and warning of legal action. Competition Watchdog: The Commission on Protection of Competition opened a preliminary enquiry into alleged retail-chain pressure on fruit and vegetable suppliers under the “Care Basket” initiative, after earlier probes into Kaufland and T-Market. Fiscal Policy: EU Commissioner Valdis Dombrovskis said the European Commission will propose opening an excessive deficit procedure for Bulgaria, citing a 3.5% deficit in 2025 and defence-spending pressure. Tourism & Governance: Parliament’s tourism committee chair held an initial working meeting with the National Tourism Board to align long-term policies; separately, Bulgaria’s tourism ministry discussed UN Tourism cooperation and a planned investment forum. Energy Cooperation: PM Radev said Türkiye wants renegotiation of the BOTAS deal to deepen energy cooperation, including transport flows. Energy Storage Deal: Sungrow and Sunotec commissioned Energy’s 150 MW/600 MWh battery storage project in Bulgaria, with more capacity planned by end-2026. Media: CEM unanimously approved BNT DG Milena Milotinova’s management programme, including preparations for Eurovision 2027.

Defence Policy Shift: Bulgaria’s Defence Minister Dimitar Stoyanov says the country can’t send more weapons to Ukraine because stocks would fall below required minimum levels, while President Iliana Iotova backs the claim after a review. Energy Storage Milestone: Sungrow and Sunotec commissioned Energy’s 150 MW/600 MWh battery storage project in Bulgaria under the RESTORE programme, with 2.2 GWh more planned online over the next two months. EU Migration Overhaul: The EU Migration and Asylum Pact entered into force, aiming to tighten external border controls and speed up asylum and return procedures, with a solidarity mechanism for member states. Public Finance & Markets: Parliament passed on first reading revisions to the Public Debt Act, setting rules for government securities dealers and enabling new issuance and electronic registration for investors. Monetary Leadership: President Iotova appointed Nikolay Nenovsky to the Bulgarian National Bank governing council. Consumer Cost Pressure: Retailers cut prices on “Care Basket” items by 15%, but producer groups warn the burden may be pushed back onto Bulgarian suppliers. Regional Business: The Balkan Business Forum opens in Bansko, focusing on transport, industrial ecosystems, AI and Balkan investment cooperation.

CPI Holdings: Cyprus-based CPI Holdings says it has sold its 100% stake in Bulgarian receivables vehicle Debt CPI Bulgaria, disposing of the full 650,000-share capital as part of its investment cycle. Farm Policy: Agriculture Minister Plamen Abrovsky told farmers the state will step in only when they bring specific, documented cases of retail-chain pressure tied to the “Care Basket” price push. Budget Risk for Agriculture: Abrovsky warned Bulgaria has “irretrievably lost” over EUR 118m under the 2025 rural development plan, with further EU-funding losses possible in 2026 if write-off steps aren’t handled fast. Defence Industry: Deputy PM Alexander Poulev backed defence-industry development as a government priority, stressing support for Bulgarian firms’ participation in European supply chains and innovation in digitalisation and cybersecurity. Tourism & Consumer Rules: Bulgaria’s National Tourism Board marked its 20th anniversary with a “4 Seasons 4 You” push; meanwhile, Parliament banned unjustified price hikes and ordered large retailers to publish daily online prices for the consumer basket. Energy & Connectivity with Türkiye: PM Rumen Radev and Turkish FM Hakan Fidan highlighted deeper cooperation on gas and transport, including plans for a new border crossing near Kapikule and upgrades to energy interconnections. Renewables Finance: EBRD approved a EUR 175m loan for PPC’s wind and solar rollout across Bulgaria, Greece and Romania.

Consumer Protection Clampdown: Bulgaria’s Parliament banned economically unjustified price hikes and ordered certain high-turnover retailers to publish daily online prices for the “care basket,” with the consumer watchdog set to verify justification. Competition Watch: Amendments to the Protection of Competition Act bar dominant firms from quoting excessively high prices and empower the watchdog to fine violators up to 10% of turnover, while also setting up a supply-chain traceability register for food and agricultural goods. Tourism & Regional Growth: The Tourism Ministry pushed cultural routes as a way to extend the season and boost interior regions, as a national “Cultural Routes – Bulgaria 2026” event opened in Plovdiv and Hisarya. Black Sea Business Outlook: Hotel operators say demand is shifting toward last-minute bookings and stronger online visibility, but overall expectations for the summer remain resilient. Energy Storage Investment: Sungrow and Sunotec commissioned a 150 MW/600 MWh battery storage project in Nova Zagora under Bulgaria’s RESTORE scheme, supporting renewables integration via balancing markets. Aviation Capacity Plans: Burgas and Varna airports say they’re ready for growth after major modernization, with calls for more local control over EU funds. Tax Administration Leadership: Boris Mihaylov was appointed Executive Director of the National Revenue Agency, replacing Milena Krastanova. Geopolitics & Security: India’s Jaishankar told Bulgarian leaders that “dialogue and diplomacy” is the only solution amid global volatility, while the U.S. warned Europe about migration framed as an “invasion.”

Ukraine War Policy: Bulgaria’s PM Rumen Radev says the government will stop providing weapons and ammunition from army warehouses to Ukraine, stressing “provision, not sale,” while the Ukrainian MFA says cooperation continues on commercial terms and benefits Bulgarian defence firms. Energy Restructuring: The government moves to restructure Bulgarian Energy Holding, including separating Maritsa Iztok Mines and TPP Maritsa Iztok 2, to protect over €1bn in Recovery and Resilience Plan funding. Competition Watch: The Commission on Protection of Competition probes whether retail chains pressured farmers to cut supply prices under the “Care Basket” initiative, warning against unfair trading practices. Public Finance: Parliament debates raising the state debt ceiling by up to €3.8bn to pre-finance 2026 payments under the National Recovery and Resilience Plan. Business & Markets: Bulgaria’s ESG reporting expands with a new BSE-backed survey of 149 companies; Bulgaria ranks 35th of 40 in the 2026 Wealth of Nations Index, with weak public spending in education, healthcare and environment. Diplomacy & Trade: India’s Jaishankar meets Bulgarian leaders to deepen cooperation in trade, pharma, semiconductors, AI, defence and mobility; SEECP in Sofia highlights regional EU integration support for Albania and Moldova. Sports & Events: Nearly 400 rowers from 22 countries compete in Plovdiv’s World Rowing Cup (June 12-14).

Ukraine War Policy Shift: Bulgaria’s PM Rumen Radev says Sofia is ending weapons transfers from its army stocks to Ukraine, arguing the war won’t be solved militarily and calling for diplomacy; Defence Minister Dimitar Stoyanov adds Ukraine’s main need is manpower, not more arms, while Bulgaria has already sent 13 aid packages since 2022. Commercial Defence Cooperation: Ukraine’s Foreign Ministry counters that it receives no free military aid from Bulgaria and that defence cooperation continues on commercial terms, benefiting both sides via Bulgarian defence industry sales. EU Security Mood: A new ECFR poll finds only 11% of Europeans see the US as an ally, with majorities doubting Washington would defend them, pushing support for stronger European self-reliance and higher defence spending. Energy & Industry Signals: Bulgaria’s industrial output fell 4.1% y/y in April, driven mainly by a sharp drop in mining and utilities. Power Sector Restructuring: Maritsa East Mines and Maritsa East 2 TPP will be separated from Bulgarian Energy Holding (BEH) and moved to a new state company, tied to Recovery and Resilience funding. Health & Biotech Business: Genesis Pharma and Alnylam expand their RNAi therapeutics partnership to cover the Nordic region, adding Denmark, Finland, Norway and Sweden to markets including Bulgaria. Drug Market Risk: An EU drugs report warns of more potent substances and synthetic opioids, including nitazenes, with Bulgaria reporting fentanyl-linked deaths. Cross-Border Crime: Europol dismantled nine illegal IPTV networks in Operation Kratos 2, led by Bulgaria with arrests across multiple countries.

Bulgaria-Ukraine Policy: Bulgaria’s new government plans to halt further arms supplies to Ukraine, with Defence Minister Dimitar Stoyanov saying Kyiv needs “more people, not more weapons” and calling for a “just peace” set by both sides—sparking immediate political pushback as Denkov demands clarity on the government’s exact position. Public Finance: The Budget and Finance Committee approved amendments allowing the cabinet to raise up to EUR 3.8 bln in new public debt to cover the 2026 deficit and pre-finance Recovery and Resilience Plan payments. EU Environment & Construction: The EU Commission is “closely following” Bulgaria’s Natura 2000 construction scandal near Varna, tied to alleged illegal works on 100+ buildings in the Baba Alino case. Food & Agriculture: The Food Safety Agency tightens checks on dairy imports, while the Agriculture Ministry targets livestock support and faster irrigation reforms. Business & Retail: JUMBO Group reports ~4% sales growth in May, with Bulgaria up ~16%. Digital & Telecom Policy: Bulgaria backs EU rules on European Business Wallets and pushes for an open, secure, rules-based digital order. Regional Diplomacy: SEECP meetings in Sofia highlight Bulgaria’s push for regional connectivity and stability. Energy Prices: The energy regulator is set to discuss proposed electricity price rises and a 4.58% average heating/hot water increase from July 1.

Energy Prices Watch: Bulgaria’s energy regulator (EWRC) opened talks on new electricity and heat tariffs from July 1, proposing an average 3% rise for household power and a 4.58% increase for heating/hot water, after companies previously sought much steeper jumps. Bulgaria–China Business Ties: Chinese State Councilor Shen Yiqin visited Sofia and met President Iliana Iotova, PM Rumen Radev and Deputy PM Galab Donev, signing an MoU between labor ministries and discussing deeper cooperation in economy, trade, tourism and advanced tech. Regional Finance for Renewables: The EBRD approved a EUR 175m loan for PPC renewable projects across Romania, Greece and Bulgaria, targeting about 400 MW of wind/solar and including skills support for battery storage. Defence Tech Spotlight: Bulgarian defence-AI startup BlackBelt Technologies debuted at IDEES Plovdiv, pitching its autonomy software and starting exploratory talks with Turkish UAV maker TEUSAN. Drug Market Shift: EU reporting flags changing trafficking tactics and rising synthetic-opioid risks; in Bulgaria, fentanyl was linked to 100+ deaths (2024–2025), while needle access remains inadequate in several countries including Bulgaria.

Lukoil Watch: Bulgaria’s government has introduced Evgeni Simeonov as the new special commercial administrator for Lukoil assets, saying the move targets stronger accountability and fuel-supply stability; preliminary info suggests crude deliveries to Neftohim Burgas are secured until end-July, while officials stress there is no plan to nationalize the company. Interior Ministry Shake-up: Acting Interior Ministry Secretary General Georgi Kandev announced his departure effective June 8, triggering political calls for hearings after his resignation. Bulgaria–China Push: President Iliana Iotova and PM Rumen Radev met Chinese State Councilor Shen Yiqin to expand cooperation in economy, trade, tourism, tech and education, with talks also raising a possible Sofia–Beijing direct flight; Finance Minister Galab Donev also met Shen and signed a labour-policy cooperation intent. Retail & Cost of Living: Major chains will cut prices on items in the “Care Basket” initiative from June 18, with over 100 products marked and reductions of at least 15% in some categories. EU Policy Pressure: Bulgaria backed a balanced approach to the EU’s corporate car/van electrification plan, joining other governments resisting binding quotas over competitiveness and uneven charging readiness. Energy & Industry: Defence Minister Dimitar Stoyanov urged more EU support for SMEs in defence projects, arguing current instruments mainly benefit large manufacturers. Education & Labour: Teachers in secondary education signal high strike readiness if 2026 pay expectations aren’t met, while Sofia University reports 1,431 international students from 55 countries.

Care Basket Price Cuts: Bulgaria’s government and leading retailers (Billa, Dar, Kaufland) are rolling out a “Care Basket” of over 100 basic products from June 18, with chains committing to at least 15% discounts for six months to boost affordability and support Bulgarian producers. Lukoil Asset Management: Deputy PM and Economy Minister Alexander Poulev introduced Evgeni Simeonov as special commercial administrator for Lukoil’s Bulgarian assets, stressing transparency, professional management and strict financial discipline, while warning Bulgaria could face a EUR 3 bln arbitration risk after Litasco filed a dispute. Energy Supply Continuity: Simeonov said preliminary indications point to crude oil deliveries to Neftohim in Burgas being guaranteed until end-July, with a detailed state and financial analysis due within a month. EU Transport Policy Fight: Bulgaria backed a balanced EU approach on corporate vehicle decarbonisation, opposing mandatory quotas that could burden SMEs and calling for incentives and infrastructure readiness instead. Teacher Pay Tensions: Podkrepa’s education union reports high strike readiness: 92% of secondary education staff would protest if 2026 budget pay expectations aren’t met, with 97% opposing salary links to student results. Retail & Property Deals: South Africa’s Hyprop agreed to buy Galleria Burgas for €122.2m, while local retail continues to watch consumer resilience as shopping-centre operators pursue Eastern Europe growth. Tourism Connectivity: The Lublin–Burgas air route launched for the summer season, targeting passenger growth to over 500,000 in 2026. Education Internationalisation: Sofia University enrolled 1,431 international students from 55 countries in 2025/26, up from 1,303 the year before.

Bulgaria’s Economy & Public Finance: Bulgaria’s Q1 2026 growth is reported at 3.1% year-on-year and among the EU’s strongest, while the European Commission is again moving on fiscal discipline: an excessive deficit procedure is confirmed as a risk, and Bulgaria’s budget deficit is flagged as the highest for May in 20 years, with the finance ministry pushing “lowest possible deficit” measures instead of tax hikes. Energy & Industry: DPM Metals says it has struck a major gold-copper porphyry intercept near its Chelopech mine in Bulgaria—713 metres grading 1.31 g/t gold and 1.16% copper—potentially expanding its resource base. EU Policy Direction: The European Commission unveiled the 2026 European Semester Spring Package, aiming to boost competitiveness, resilience, skills and decarbonisation while tackling housing and social fairness. Business & Compliance: A new SCC board member, Rosen Hristov, says his role is to stop corruption and misappropriation by drafting preventive, transparent procedures after an audit of the state company and subsidiaries. Fraud Watch: Italy has arrested another suspect in the Caritas Luxembourg fraud case, linked to alleged money laundering via fake firms and accounts; earlier arrests included Bulgarian “money mules.” International Trade/Branding: e.l.f. Beauty’s rhode expands into Mexico and adds seven European markets including Bulgaria, signaling continued consumer-brand push into the region. Cost of Living: Fuel prices remain a pressure point across Europe, with Bulgaria listed among higher diesel prices in the latest comparison. Demographics & Talent: A UN projection highlights Europe’s population decline by 2100, with Bulgaria among the biggest losers—an issue that will shape labor supply and demand for years.

Politics & Governance: Bulgaria’s DSB party warns that the new government’s early moves risk “command-style” rule, higher public spending and isolation from EU policies, arguing Bulgaria needs a strong right-wing opposition. Public Administration: Acting Prosecutor General Vanya Stefanova says her priorities are stronger professionalism, better coordination with institutions and investigations that hold up in court. State-Owned Firms & Integrity: A new SCC board member, Rosen Hristov, says he will focus on stopping corruption schemes and drafting procedures to prevent misappropriation. Fraud Probe: Italy arrests Clarissa La Porta in the Caritas scandal, linked to alleged money laundering via fake firms; the case already saw Bulgarian “money mule” convictions. Business & Investment: DPM reports a major Bulgaria gold-copper discovery near Chelopech: a 713m intercept grading 1.31 g/t gold and 1.16% copper. Energy & Security: NATO’s eastern flank is racing to rearm amid defense-gap concerns as US pressure grows. Culture & Tourism: Kazanlak’s Rose Festival draws visitors for the rose-picking ritual and parade; Sofia hosts the 20th Water Tower Art Fest through June 15.

Bulgarian Economy & Finance: Prime Minister Radev said Bulgaria’s deficit is driven by past “hidden costs” and past administrations’ deficit management tactics, citing unpaid invoices surfacing now at over €2.2bn, while the acting Prosecutor General Vanya Stefanova signed an extradition request for Stoyan Mavrodiev, detained in Serbia, for prosecution linked to the Bulgarian Development Bank case. Judiciary & Governance: Acting Prosecutor General Vanya Stefanova outlined priorities for her six-month term, focusing on stronger professionalism, better dialogue with institutions, and investigations that hold up in court. Public Sector & Healthcare: NHIF Deputy Director Momchil Mavrov defended his record after political calls for dismissal over alleged embezzlement schemes, insisting inspections found no irregularities. Innovation & Skills: Green Transition Forum 6.0 in Sofia put AI, education and innovation front and center, with EU and Bulgarian officials urging faster scaling of companies and better future-ready skills. Energy/Industry: Deputy PM and Economy Minister Alexander Poulev said the State Consolidation Company’s executive director will keep his post, while the board was strengthened with international restructuring experience amid concerns about the firms’ real financial condition. EU Policy Watch: A pay transparency deadline study says Bulgaria is among countries delaying implementation until 2027.

State Finance & Deficit Politics: Prime Minister Rumen Radev blamed past “contortions” for Bulgaria’s deficit, citing hidden costs and unpaid invoices surfacing, while Finance Minister Galab Donev said the government will avoid short-term tax hikes and instead pursue long-term spending cuts to keep the deficit within EU limits. Prosecution & Governance: Acting Prosecutor General Vanya Stefanova signed a request for the extradition of S. M. detained in Serbia—linked to former Bulgarian Development Bank executive Stoyan Mavrodiev—while NHIF Deputy Director Momchil Mavrov defended his record amid calls for dismissal. Economic Performance: Bulgaria’s GDP grew 3.1% year-on-year in Q1 2026, with services still the biggest share of value added, and a negative balance in goods and services. Investment & Industrial Policy: Deputy PM Alexander Poulev said investment will be coordinated at Council of Ministers level, with Sofia’s industrial zones and supplier integration into investor value chains highlighted. EU Policy Watch: Bulgaria is among countries lagging on the EU Pay Transparency Directive, with many member states missing the 7 June deadline. Fintech & Payments: Sofia-based Paypercut raised €5m seed funding to expand its payments platform across Central and Eastern Europe. Space & Tech: Leaf Space and Bulgaria’s EnduroSat plan to test a satellite connectivity service, with TreeNet nodes launching in 2027. Business-Adjacent Security: Cyber researchers flagged the Silent Ransom Group’s fast-flux infrastructure as extortion activity continues.