Banking System under Attack – In what do Bulgarians trust?

Bulgaria, 25 Jun - 08 Jul 2014
Banking affair upsets Bulgaria ++ Russian Foreign Minister on a visit to Sofia: Rising pressure on Bulgaria ++ Leader of the Bulgarian Socialist Party to give up the post of chairman. by Raycho Penchev
Banking affair upsets Bulgaria


On Friday, June 27th, hundreds of money savers lined up for hours in front of the branches of the First Investment Bank (FIB), Bulgaria’s third biggest lender. On this day alone, more than €410 million were withdrawn from FIB bank accounts in a matter of hours. Small investors feared for their deposits after receiving text messages, emails and alerts in social media.

All this came after another bank, the Corporative Commercial Bank (KTB), was hit over a week ago by a rush to withdraw deposits, triggered by a negative media campaign. Hence, the Central Bank took temporary control over KTB. Nevertheless, there are speculations that the attack on KTB was prompted by business tensions between the controversial media mogul Delyan Peevski and the owner of the bank, Tsvetan Vasilev. For instance, the media that spread the bank panic are owned by Peevski.

The Bulgarian authorities tried to calm down the situation and urged the public not to succumb to mere speculations regarding the banking system. Furthermore, Bulgaria’s national security agency arrested six people suspected of sending emails and messages to customers, undermining the trust in the banks.

In fact, Bulgarians are once bitten, twice shy. The current affair has rekindled old fears reminding the country of the grave financial crisis of 1996-97 when 14 banks collapsed and the country hit rock bottom economically.

The reasons for the current bank crisis appear not to be systematic as the country’s banking system is stable and the liquidity very high. That is why the situation in Bulgaria differs from the bank crisis in Cyprus. In Bulgaria, the problem emerges as a subject of outside the banking system.

Russian Foreign Minister on a visit to Sofia: Rising pressure on Bulgaria


Russian’s Foreign Minister Sergey Lavrov paid an official visit to Sofia. The occasion of the visit was the 135th anniversary of diplomatic relations between Bulgaria and Russia. However, Lavrov’s official visit to Bulgaria came at a time when the Bulgarian government had decided to freeze the strategic South Stream gas pipeline from Russia through the Black Sea and Bulgaria to Central Europe and Italy. The suspension of the project and the controversy that has surrounded it because of adoption and implementation of EU law was the main topic of Russian’s FM visit.

PM Plamen Oresharski assured Lavrov that the gas pipeline was 'one of the most important' projects for Bulgaria and that the government has made out good arguments in favour of the project, especially targeting the EU Commission’s statement there is non-compliance with EU rule. 

Nevertheless, Lavrov insisted that the South Stream pipeline be excluded from the EU’s Third Energy Package. For instance, he stressed the fact that the bilateral intergovernmental agreement between Russia and Bulgaria was signed before the Third Energy Package entered into force. That is way, the EU law ‘should not be applied retrospectively’, he said.

Leader of the Bulgarian Socialist Party to give up the post of chairman


Sergey Stanishev, leader of the Bulgarian Socialist Party (BSP) and the Party of European Socialists (PES), has announced that he will give up the post of BSP-leader. The announcement came soon after the Bulgarian Parliament released him as MP, which would allow him to enter the European Parliament.

'I am not giving up my seat to sit at the first or at the last row. I am staying in the front line of the battle. I will stand by the new leader,' stated the Chair of the BSP in his speech at the plenary meeting. Furthermore, he announced that on the upcoming congress in July the election platform for the early elections on October 5th will be adopted and a new BSP Chair elected.Current Minister of Economy and Energy, Dragomir Stoynev, is most likely to succeed the post as other candidates do not enjoy Stanishev’s trust.

Finally, political experts admitted that there is both internal and external political background of Stanishev`s decision to resign. While, on the one hand, the newly elected BSP Chair would stay in the shadow of Stanishev, the current BSP Chairman would, thus, guarantee his positions in the PES as a leader of the Bulgarian Socialists.


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