The state buying "Lukoil-Neftohim" is actually a good idea, but Peevski managed to taint it, and Borisov also promised "Lukoil" to Orban because this is his ticket to Trump. The Minister of Economy of Hungary was here 2 days ago and the media posted a photo of him talking about tourism with our Minister Borsos. Lies and fraud, the real reason is "Lukoil-Neftohim."
This is what economist Georgi Kadiev commented on his Facebook page. Here's more of his analysis:
It's all geopolitics, especially energy companies, so I'll move on to the geopolitical news:
• In Denmark, 46% of the population sees the US as a "major threat" to their country, according to a recent survey. By comparison, North Korea is a threat to 44%, Iran to 42%. 78% of Danes are against selling Greenland to Trump. Appetite comes with eating, and after Trump asks for Greenland, Panama and Canada, and Musk suggests renaming the English Channel, there will be more bites. I suspect Gaza and its beautiful coastline are fine, but to do that they have to move the Palestinians to Egypt and Jordan, which Trump has already demanded with the words "we do a lot for them, and they will do it".
• In Germany, Merz got himself into a perfect storm with his decision to support legislation to stop migrants promoted by the Alternative for Germany. For those of you who know German, the law is called the Zustromsbegrenzungsgesetz. The rest of you, you don't have a chance to pronounce it. The important thing to know is that Angela Merkel came out against it, the Jewish community is against it, the Christian church is against it. A prominent German Jewish publicist and talk show host left the Christian Democrats in protest. A Holocaust survivor returned his Order of Merit - the highest honor the federal republic offers. Media pressure is at its peak. Either way, Merz has broken the cordon sanitaire around the Alternative for Germany. This is also happening in other EU countries, Austria for example. Cordons sanitaires basically destroy the political center because they limit which direction it can form coalitions, and I see less and less future in them. They certainly won't work in Bulgaria.
• In France, the threat of a no-confidence vote against François Bayrou has increased. The Socialists have said they are having difficulty meeting their demands. Earlier this week, the Socialists threatened to oust Bayrou over his choice of words on migration, and then increased their budget demands. France is not doing well economically, with a budget deficit of 5.46% in 2023, an expected budget deficit of 5.96% in 2024 and a projected deficit of 5.92% in 2025, and with a projected unemployment rate of 8.6%. Are they asking us to run a 3% deficit to join the eurozone?
• In Italy, the country continues to enjoy a relatively rare period of political stability. Meloni's government is performing better than governments in any other major eurozone country. Her Fratelli d’Italia party still enjoys a lead in the polls and the right-wing ruling coalition is stable. Meloni is also the only European leader of a major country on good terms with Trump, which will surely be a bargain. But that does not mean the economy is doing well. GDP growth is just 0.5%, unemployment is 6.2%, the budget deficit of 7.4% in 2023 has narrowed to a projected 3.8% in 2024, but foreign debt is a terrifying 138% of GDP.
• In Brussels, a meeting yesterday between Slovak Prime Minister Robert Fico and representatives of the European Commission on stopping the transit of Russian gas through Ukraine was postponed until Monday due to the closure of airspace at Brussels airport for technical reasons, which forced the Slovak government plane to return to Slovakia. Fico plans to meet with Ursula von der Leyen and European Commissioner for Energy Dan Jørgensen. Slovakia entered a major conflict with Ukraine after the suspension of Russian gas transit on January 1. Zelensky called Fico a conduit for Russian interests. Fico's party is second in the polls and has no chance in the elections unless it convinces Brussels about Russian gas.
• In Spain, the government agreed with the unions to raise the minimum wage by 4.4% to 1,184 euros. This is a nominal increase of 50 euros and is within the range of the increase in 2024. The unions had initially wanted 6%.
• In Romania, the government officially reported a budget deficit of 8.65% in 2024. I remind you that the budget deficit in 2023 was 5.6%, in 2022- 5.75%, in 2021- 6.74%. The significant expansion of the deficit is due to a drop in revenues by 10.3%, while expenditures increased by 6.6%. The reason for the drop in revenues is the significantly lower inflow of funds from the EU, while the increase in expenditures comes mostly from higher capital expenditures to mitigate the lower absorption of EU funds and higher social expenditures coming from pension increases. Romania is in a severe crisis and has eliminated a bunch of tax breaks and frozen expenditures, but in 2025 it aims to reduce the deficit to 7%. Romania finances the deficit mainly with external debt, which from about 58.8% of GDP at the end of 2023 is about 62.3% of GDP at the end of 2024.
• In Turkey, the government maintained a subsidized price of electricity for households with annual consumption up to 5,000 kWh, but eliminated subsidies for consumption above that. There are 42 million household subscribers in Turkey, with 3% of them having an annual consumption above 5,000 kWh. The state subsidy for electricity and gas costs the government about 275 billion lira (14.5 billion leva) in 2023 and approximately 400 billion lira (21 billion leva) in 2024. I am also a supporter of 2 tariffs for households - subsidized up to a certain level and unsubsidized above that. I see no reason for an owner of a 150,000-lv. electric car to charge at home with subsidized energy.
• In Croatia, inflation has skyrocketed despite its membership in the eurozone and despite government price controls on 30 products. The new list of controlled prices will include 70 items, up from the previous 30, Prime Minister Andrej Plenković announced yesterday at a meeting with representatives of retail chains and manufacturers. The new items include bread, barley, rusks, pasta, dried meat, canned goods and fish, as well as additional dairy products. Each retailer will have to choose at least one product from each category to have a capped price. Clear labeling of capped price products will be mandatory to ensure that consumers are well informed. Retailers will also be required to display previous prices alongside current prices and to regularly report price data. In addition, stores larger than 400 square meters must create a special shelf for products with a limited price. If I were our government, I would immediately do the same - what greater populism than this at someone else's expense? But our politicians do not read, do not care and do not know. But you do.
• In Montenegro, the government reported a growth in industrial production of 15.3% year-on-year in the fourth quarter of 2024. The increase came mainly from the pharmaceutical sector, where production increased sharply by 82.9% year-on-year. Food production also increased by a stronger 19.5% year-on-year.
• In Belarus, Lukashenko signed a decree to slightly increase utility tariffs. According to the decree, however, utility payments should amount to up to 3.8% of disposable income in a household of two adults earning an average salary. In a household of two pensioners earning an average pension, the share of utility payments increases to 8.3%. Translated into our terms, with an average pension of 1030 leva (October 2024), the monthly expenses for electricity, water, heating, gas should not exceed (2x1030) x 0.083= 170 leva per month.
• In Russia, the government reported a slight decline in oil production, which in 2024 amounted to 516 million tons, compared to 530 million tons in 2023. Exports reached 240 million tons, or 46.5% of the produced amount. Russia also produced 685 billion cubic meters. gas, an increase of 7.6% year-on-year. Pipeline gas exports grew by 15.6% year-on-year, totaling over 119 billion cubic meters, while liquefied gas exports increased by 4%, reaching approximately 47.2 billion cubic meters. Coal production in 2024 is approximately 443.5 million tons (+1.3% year-on-year). Tell me, what are these sanctions, with Russia's production and exports growing in all directions?
• In Ukraine, the government has announced that it may discuss gas transit if the EC decides that there is a need for such transit. Hungary and Slovakia are lobbying for the resumption of gas transit through Ukraine. The five-year contract for the transit of Russian gas through Ukraine expired on December 31 and was not renewed due to the war. Zelensky said at his recent meeting with Moldovan President Maia Sandu that Ukraine is ready to discuss the transit of Azerbaijani gas to Europe through Ukraine, but ruled out the transit of Russian gas. Slovak Prime Minister Fico warned that Slovakia would stop electricity transit to Ukraine if gas transit is not resumed. However, Ukraine is not dependent on energy from Slovakia, importing it also from Poland, Hungary and Romania.
Now you know more about the world around us, as I see it.