Sunday

20th Aug 2017

Bulgaria jittery after bank run 'plot'

  • Sofia: Early elections will take place on 5 October (Photo: dimnikolov)

Bulgaria, already grappling with a severe political crisis, is now trying to deal with what the government has called an organised attempt to destabilise its financial system.

On Friday (27 June), Bulgarians lined up for hours to withdraw their money after receiving text messages, emails and alerts on social media that their deposits were not safe at the First Investment Bank, the country’s third biggest lender.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

In response, President Rossen Plevneliev on Sunday held an emergency meeting with political party leaders and Ivan Iskrov, governor of the central bank.

After the five-hour meeting he emerged to say that the monetary board is unshakable, that companies’ and citizens’ money is safe and that Iskrov will “secure all necessary means and actions to guarantee banks’ stability”.

"There is no cause or reason to give way to panic. There is no banking crisis, there is a crisis of trust and there is a criminal attack,” said the president.

He also took the opportunity to call early elections on 5 October with the parliament to be dissolved on 6 August, after the EU vote in May severely weakened the governing Socialist party.

Bulgarians were not entirely reassured after the president’s words however. The queues in front of the First Investment Bank on Monday (30 June), although smaller than on Friday, were still numbering around 100 people.

Interior minister Tsvetlin Iovchev said electronic communication was an apparent tool in a misinformation campaign that is meant to shake the country.

Seven men have been arrested so far on suspicion of spreading “false, ill-intended information against Bulgarian banks to destabilise the banking system”, according to the State Agency of National Security.

The European Commission has also stepped in, announcing Monday that it has approved a credit line for the banks to the tune of 3.3 billion leva (around €1.7 billion). On Friday alone, the First Investment bank paid out more than €410 million to the people lining up in front of its offices.

All this follows similar events at the Corporate Commercial bank after it was hit over a week ago by a rush to withdraw deposits, prompted by negative reports in local media. The country’s fourth largest lender has now been temporarily taken over by the central bank.

The media that spread what the government called “rumors and malicious public statements" are owned by Delyam Peevksi, a media mogul and MP of the Turkish Minority Party.

His appointment last year as the head of the State Agency of National Security outraged tens of thousands of Bulgarians and sparked the biggest protests since the fall of communism.

The government rescinded the appointment but it never fully recovered from the political crisis resulting from the protests.

There has been speculation that the attack on Corporate Commercial Bank was provoked by tension between Peevski and the owner of the bank, Tzvetan Vasilev.

Bulgaria’s president said the country’s currency will continue to remain pegged against the euro despite the upsets.

Airbnb too 'different' to pay EU tax

US home rental firm said its “model is unique” because most of the money stays in pockets of local people, as France and Germany prepare EU tax crackdown.

Greece looking at bond market return

Greece could issue 3-year bonds as early as this week, for the first time in three years, amid mixed signs from its creditors and rating agencies.

EU cautious with German diesel plan

The European Commission welcomed the German carmakers' pledge to update software in diesel cars, but is waiting for details on how emissions will be reduced.

News in Brief

  1. Macedonia sacks top prosecutor over wiretap scandal
  2. ECB concerned stronger euro could derail economic recovery
  3. Mixed Irish reactions to post-Brexit border proposal
  4. European Union returns to 2 percent growth
  5. Russian power most feared in Europe
  6. Ireland continues to refuse €13 billion in back taxes from Apple
  7. UK unemployment lowest since 1975
  8. Europe facing 'explosive cocktail' in its backyard, report warns

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceDoes Genetics Explain Why So Few of Us Have an Ideal Cardiovascular Health?
  2. EU2017EEFuture-Themed Digital Painting Competition Welcomes Artists - Deadline 31 Aug
  3. ACCABusinesses Must Grip Ethics and Trust in the Digital Age
  4. European Jewish CongressEJC Welcomes European Court of Justice's Decision to Keep Hamas on Terror List
  5. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  6. Centre Maurits CoppietersWe Need Democratic and Transparent Free Trade Agreements Says MEP Jordi Solé
  7. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  8. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  9. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  10. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  11. ACCAAnnounces Belt & Road Research at Shanghai Conference
  12. ECPAFood Waste in the Field Can Double Without Crop Protection. #WithOrWithout #Pesticides