Bulgaria's Bank seems peculiarly inexplicable

Interesting to see the coverage of this story. So last week the US is putting pressure on Bulgaria to stop investing in the South Stream pipeline which Russia wants to use to avoid Ukraine.

This weekend, there was a bank run on two Banks in Bulgaria. Whilst the Country is known for its endemic corruption, the economy has actually been pootling along OK with plenty of Euro subsidy for the locals to feast one - €2 billion a year is a lot of money to share around.

So why the bank run? Why two random arrests of men said to be starting it via text messages? With Bond's at 3.7% yields and a deficit lower than the UK's what was the problem?

One view is this is an oligarch spat which has got out of control, but this feels implausible on its own.

Nobody currently knows, but I would be very suspicious of their friends in Moscow having had a little say in this. It can;t be much fun being a broke pawn in the great power game!

The great game anew

Poor little Bulgaria. Known for its endemic corruption, which even the EU has described as breath-taking, is having a hard time. In the recent past it has been known for its place as being the only Country in the EU where a former Prime Minister has been jailed for corruption.

Now though the US has stepped in to make sure Bulgaria is involved in the Great Games on the side of the EU and US. Bulgaria had agreed to help Russia build a South Stream gas pipeline (funded by Gazprom) which would mean that gas could come from Russia via the Balkan states and avoid Ukraine.

With the recent events in mind, the US has stepped in which EU backing to put a stop to this project and called into question the process of bidding  - as Russian and local firms helpfully won the tender process which seems to have not included major Western manufacturers, natch.

So little Bulgaria, caught rigging its own processes and taking the Russian rouble, will now have to be paid up member of the EU. Best of all Bulgaria has said this is unhelpful interference by the EU and just this morning the Energy minister has said the building of the pipeline will prove 'irreversible.'

Russia has yet to make a meaningful comment as it must decide what step to take next. Russia may well find it harder to work with full EU members than putting pressure on the Ukraine and former CIS Countries who have no NATO guarantees.

We will see how this plays out, it is possible the Russians have expected this and after all, if they conquer Ukraine they won't need the South Stream project anyway.