The renowned Swiss newspaper “Le Temps” published in its Monday, June 30, edition an article about the bank crisis in Bulgaria. In the comments’ part, the author, Alexander Levy, cites Atanas Tchobanov, editor of Bivol in saying that the crisis in Bulgarian private banks – Corporate Commercial Bank (KTB) and First Investment Bank (FIB) – is caused by rivalries in the entrails of Bulgarian mafia, without excluding the intervention of its Kremlin puppeteers. The translation of the article in Bulgarian and English was done by Bivol. Expect our own comments about the crisis and the “bad apples”.

Banks’s Branches under Siege in Sofia

Alexandre Lévy, Le Temps, 30.06.2014

Authorities in Bulgaria denounced a series of “organized attacks” against the banking sector. Two banks are on the edge. In a country in the midst of political crisis, led by a government expected to resign any moment now, some people succumb to panic

Kilometer-long lines at bank branches, ATMs running out of cash, and rumors, each wilder than the other… Bulgarians had not seen such scenes since the 1997 financial crisis which toppled a dozen of banks and resulted in a record hyperinflation. And most importantly, they thought they never would since their country joined the European Union in 2007 and its currency, the lev, was pegged to the euro.

“We are witnessing unprecedented attacks against the country’s banking system. The aim is to destabilize the State, “said on June 27, Ivan Iskrov, Governor of the Central Bank (the Bulgarian National Bank, BNB). In the aftermath, the BNB boss denounced an “epidemic of rumors” and called on politicians to avoid alarming statements. But while officials ensure that all measures are taken to avoid the 1997 scenario, nothing seems to be able to stop what looks more and more like a movement of collective panic.

It all started a week ago, with BNB placing under supervision Corporate Commercial Bank (KTB). The fifth largest bank in Bulgaria, KTB, had the distinction of belonging to an oligarch with shady reputation, Tsvetan Vasilev, often presented as one of the occult financial experts, pulling the strings of Bulgarian politics. Carefully avoiding talk of “bankruptcy”, BNB nevertheless dismissed senior managers of KTB from their duties and suspended for a period of three months all operations of the Bank. The majority of Bulgarians see in this the outcome of a merciless war between the owner and his former partner, media mogul Delyan Peevski, who for nearly a year seems to dictate the political agenda of the country. It was the attempt to appoint this young man (32-year-old) in June 2013 as Head of Bulgarian “espionage” that caused a wave of protests against the current government, persisting until today.

Fears of a plot

After the fall of KTB, persistent rumors of the impending bankruptcy of another very important bank – Fibank (FIB) – spread like fire. Last Friday, customers withdrew in just one day the equivalent of 400 million euro. The crisis, now on everyone’s lips, caused an emergency meeting between the heads of the country’s security and the Chief Prosecutor. On Sunday, the country’s President, Rosen Plevneliev, convened leading politicians to define a “common strategy”.

But who may be behind these attacks? In a country, often subscribed to conspiracy theories, many have been quick to see the “long hand of Moscow”. Economist Ivan Ganev, from the Center for Liberal Strategies, reminded that Sofia has just dealt a resounding blow to the Kremlin by declaring a freeze on the construction of the South Stream pipeline, a project so much wanted by Russia in order to circumvent Ukraine. “Putin, himself, has stated repeatedly: “No one says no to Russia without any consequences,” added former Bulgarian ambassador to Moscow, Iliyan Vasilev. He also recalled that the existent in Bulgaria “currency board” remains a “thorn” in the eyes of many. Synonym of “stability” for many economists and symbol of the pro-Western orientation of Sofia, the peg to the euro would be the real target of this malicious operation. An operation certainly facilitated by the chronic weakness of the current government and the imminence of an early election.

Organized Crime

To date, the two banks involved have also something else in common – they were both included in a US cable from November 12, 2006, released by WikiLeaks. In it, the US Ambassador in Sofia, John Beyrle, compiled a list of what he called the “bad apples” in a rather healthy banking sector in the country – i.e. half-dozen institutions related to organized crime or suspected of using dirty money launderers. “I mostly see in all this rivalries in the entrails of Bulgarian mafia. But this does not exclude Russian shenanigans,” said Atanas Tchobanov (from Bivol – editor’s note), partner of Julian Assange in Bulgaria. “Bulgaria is a member of the EU. One euro equals and will always equal 1.95 lev, up until we join the euro zone,” insisted President Rosen Plevneliev after the crisis meeting Sunday. As if he wanted to ward off bad omen.


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