Frenkel goes to Bulgaria?

31 May 20261 week babelfish

(… for some inscrutable reason, a new trend is going wild on social media: that of the good-looking young man who comes to explain to us in the 2020s from the left what we explained to the left in the 2010s. Here 's an example with a very apt palette. Now, as is well known, I'm not a communicator, but I have a decent ear for music – not absolute, relative… If this work really served to raise doubts in many young minds, all climate and distinction, it wouldn't be bad. After all, it's their skin that's at stake, not mine. I don't know why, though, perhaps because I am, as a bad person, very distrustful – and I have an ear!, which, I'd like to point out, has allowed me to live to be 63 and a half despite having handled some pretty explosive substances, but anyway: I don't know why, but all this stuff seems like a smokescreen to me, the purpose of which is not so much to involve, but to de-responsibilize the left. And, if I had to tell you, the thing, however ethically sordid, I don't It might seem so negative, given that only by absolving itself of the various rounds of crimes perpetrated—the last one of relevance during the Monti era—could the left begin to face reality again. Now, it goes without saying that it's irritating to see those who exterminated us come to lecture us, and that it would be much more liberating to think that if they shattered us, it could be "the others" who could guide us on a path to redemption. But here we return to two key themes of this blog. The first is the rejection of paternalism, the rejection of Aristide, in short! If the Eurosceptic party in Italy has never had more than 17% of the vote, evidently, as Pescara native Flaiano had guessed, Italians like shit—after all, it's lukewarm, which in certain seasons can be seen as an advantage. The second is the rejection of "Nurembergism." Historical experience shows us that postwar Germany was rebuilt with and by the Nazis—we've talked about it endlessly. times, the last one here , and the Rosenburg files are always there waiting for you – which is why it wouldn't be superfluous for post-EU Italy to be rebuilt with and by the Democratic Party. It's simply how it works, and we've always told each other how it works. And speaking of which… )

Beloved brothers and sisters, today your ecclesiarch (or guru, if you prefer) returns to address our friend Bulgaria (or Bolgheria), which we have dealt with here in great detail, relying on that authentic goldmine of early warnings that are the MIP scoreboard indicators on the Eurostat website.

The opportunity to return to the topic is given to me by this short news item brought to my attention by my diligent staff (SS):

If you're kind enough to read the article, you'll find passages that won't sound entirely new to you: the accusation of having rigged the (public) accounts to join the euro, the funds frozen to blackmail the Bulgarian government into failing to implement reforms (Claudio spoke out about European blackmail today here ), etc. In short, you'll find almost everything we've heard before, except one:

Oh yes! Because in Bolgheria (as in neighboring Ruritania ) we are still in 2 BC (before Goofynomics): it's all public debt, and obviously a castacriccacoruczione, my lady! But perhaps things aren't exactly like that, or not only like that, or not mainly like that…

To give you a brief overview of what I mean, I'm providing you with a graph I developed as a case study to present to the students of the Pescara master's program:

where the source is the WEO database for April 2026, the units of measurement are percentage points of GDP, and the message is quite clear. Leaving aside for a moment the improbability of that public deficit being stuck at a fixed 3% for three years (perhaps it was true, but not credible), I would like to point out two things: the downward trend from 2014 to today in the private sector balance, which will go into deficit in 2025, and the related rise in the foreign sector balance, which will go into surplus from 2022, becoming a net lender to the Bulgarian economy (because when -CAB is positive, this means that CAB is negative, i.e., that FAB is negative, i.e., that [the private sector of] Bulgaria is importing capital, i.e., that it is borrowing abroad).

The dynamics are those of the Frenkel cycle, but of course they are barely hinted at: we are not at the glaring example of Zapatero's Spain seen here . However, this picture aligns with what emerged from analyzing the MIP dashboard: credit provision to the private sector, house price growth, nominal wage growth, real exchange rate appreciation, current account deficit, all off the charts!

One wonders how a correction in the public budget balance would help redress these imbalances. If it induced even a minimal recession, it could indeed bring the external balance back toward equilibrium (i.e., downwards). But as for the private sector, we've seen that a "restoration" of public finances doesn't always help it generate more savings, as is clearly evident in the graph. On the other hand, we had already stated that Bulgaria deserved attention, even if not for the reasons the European Commission persists in pointing out with its squinting eye. For those who want to get an idea of the possible dynamics, I refer you to the article in which I discussed Latvia's entry into the euro . Then Latvia performed the miracle, and three years after joining, I explained to you the tears and blood it shed .

Let's see how it goes this time. I predict a Bulgarian exodus. We'll talk about it again in 2029 (if not sooner)…

This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2026/05/frenkel-goes-to-bulgaria.html on Sun, 31 May 2026 16:27:05 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.