Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

The phantoms of the Soviet past

Written by Ralitsa Bobcheva, associate 
Edited by Harriet Moll, creative director
31 August 2020

Good morning,

In Bulgaria, my generation grew up listening to stories of everyday life under communism: the security of guaranteed employment, the pure joy of owning a pair of blue Levi’s jeans, and the anticipation of New Year’s eve which brought home the bubbly excitement of the West in the form of a rarely accessible bottle of Coca-Cola. 
 
For parents and grandparents across Bulgaria who experienced the Soviet days first-hand, these stories, depending on your politics, play the role of a nostalgic shelter from the corrupt reality of Bulgaria’s post-Soviet era politics or they are a way to channel anti-communist sentiment and thus reaffirm support for the ruling right-wing government. 
 
Ever since the collapse of the Bloc in 1989, a major political divide in Bulgarian politics has emerged between democrats and former communists, or what translates into an old right-left split. This divide has played into the hands of centre-right political parties which capitalise on the post-Soviet association of ‘right’ with liberal democracy while simultaneously steering the country away from liberal values. 
 
But the legacy of communism in Bulgaria’s political landscape today stretches even further. Many of the institutional structures responsible for placing Bulgaria first in the EU in the corruption stakes are inherited from communism. 
 
According to former Minister of Justice and leader of the anti-government Yes, Bulgaria! party Hristo Ivanov, the biographies of many of today’s top officials can be traced back to Soviet times. A striking example is the country’s most controversial member of parliament, Delyan Peevski, who holds control over the country’s legal system using ties to the communist-era spy service. 
 
There are signs, however, that a youth awakening is underway. Today marks the 54th consecutive day of massive anti-government protests taking place across the country. For weeks on end, thousands of mostly young people have taken to the streets, demanding the resignation of the prime minister Boyko Borissov, his centre-right government and the chief prosecutor Ivan Geshev. Branded simply ‘universal’, the protest is seeing Bulgarians unite beyond simple right-left divides.
 
The protests’ growing momentum testifies that while stories from the past may continue to be a source of comfort for some and resentment for others, the post-Soviet generation is ready to write its own story…

News

Headteachers have shared concerns over having to weigh up pupil safety against financial stability due to stretched budgets ahead of full school reopening in England this week. This comes as the education secretary, Gavin Williamson urged parents in an open letter over the weekend to send their children to school on Tuesday.
 
China is emerging first in the vaccine race, with four out of seven possible candidates for a coronavirus vaccine currently in the last stages of human trials. There are significant concerns, however, over the quality of the vaccines and whether they are being used as a tool for gaining political leverage. (£)
 
Tensions between US President Donald Trump and his Democratic rival Joe Biden intensified over the violence that has erupted at protests in Portland, Oregon. On Saturday, a man was shot dead in Portland while elsewhere in the city a pro-Trump rally clashed with Black Lives Matter protesters. In a series of 89 tweets on Sunday, Trump assailed Ted Wheeler, the city’s Democratic mayor and also accused Biden of being “unwilling to lead”. 

Business and economy

The government is set to double the price for single-use plastic carrier bags in England from 5p to 10p and end the exemption for smaller shops from April 2021, in a further move to tackle plastic pollution. According to data revealed by the government, the current 5p levy, which applies to any retailer employing 250 or more people, has resulted in  approximately 95% fewer plastic bags being used in England since 2015.
 
According to research by thinktank Autonomy, a four-day week in the public sector would open uphalf a million new jobs. The thinktank has said that it would be possible for public sector workers to go on to a 32-hour week with no loss of pay and estimates that the scheme would cost between £5.4bn and £9bn a year. 
 
The Eat Out to Help Out scheme officially comes to an end today, but some restaurants will extend the offer after the government ignored calls for extending the subsidy into September. Launched by Rishi Sunak in July, the scheme has seen 84,000 restaurants and cafes serving more than 64 million meals in just three weeks.

Columns of note

In light of the Eat out Help Out scheme drawing to an end today, Emma Hughes looks at the long-term challenges facing restaurants. Writing in The Guardianshe argues that while the scheme has been a one-size-fits-all solution, it has disproportionately benefited big-name chains by failing to take into account differences in businesses’ circumstances.
 
The Financial Times editorial argues that as Britain rises to the challenge of inequality, the financial sector has its role to play by targeting perpetuating unfairness. While there is no magic solution to end inequalities in wealth, a concerted effort by British banks and regulators could bring sustainable and long-lasting change by addressing the wealth gap, the board argues. (£)

Cartoon source: The Times

Markets

The week ahead 

Jobs figures will be in focus this week, with the US and eurozone set to release monthly employment data showing how the recovery from the pandemic is progressing as lockdowns eased in the two major global economic zones.
 
There will be a few speeches to watch out for. On Monday, Fed vice-chair Richard Clarida gives updates on the new monetary policy framework, Fed governor Lael Brainard addresses the same topic on Tuesday and New York Fed president John Williams is due to discuss the economy and Covid-19 on Wednesday.
 
Meanwhile, Bank of England policy makers, including Governor Andrew Bailey, are due to testify before the UK parliament on Wednesday.
 
Zoom is expected to post a rise in quarterly revenue today as demand for using its service has surged since the start of the pandemic. Barratt Developments, Melrose Industries and Berkeley Group are also among the companies reporting to the market throughout the week.

What’s happening today?

AGMs
Vertu Capital

Int. economic announcements
(07:00) Import Price Index 

Source: Financial Times

did you know

A German university is offering ‘idleness grants’ for people committed to doing nothing. Prospective applicants must answer the questions ‘What do you not want to do?’ and ‘Why are you the right person not to do it? (Source: @qikipedia).

Parliamentary highlights

House of Commons

In recess until 1 September

House of Lords 

In recess until 2 September 2020.

Scottish Parliament 

No business scheduled

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