Books on Bulgaria
% of GDP
Update No: 108 - (30/05/06)
Into the EU; but when?
That Bulgaria and Romania will enter the European Union (EU) is certain. But it
remains far from clear when this great change will take place.
The EU may withhold aid for Bulgaria and Romania even if they join the bloc on
time next year - because key reforms have yet to be completed, a draft European
Commission report showed on May 11th. The document, circulated for debate among
senior Commission officials, did not contain a recommendation on whether the two
Balkan countries should join the 25-nation bloc in 2007 or 2008.
EU leaders are now due to take a decision in June, although there are growing
indications the final choice may be postponed.
Luxembourg Prime Minister, Jean-Claude Juncker, said in an interview for the
weekly Le Jeudi that the countries will join the EU in 2007. A Reuters poll of
more than 40 analysts showed they were seen as having a good chance of joining
on that date.
What about aid disbursement?
The EU is a magnificent idea, but it is arguable that it has not really lived up
to its initial promise. The grand conception behind it is to banish wars between
its member states once and for all by intertwining their economies so intimately
as to render this impossible.
Europe was of course the continent that set off the two world wars of the last
century. It is doubtful that France and Germany would ever have gone to war
again even without the EU's existence. Neither benefited from either dire
conflict but the European 'balance of power' was for centuries the core issue,
and that of course kept changing. But with the EU firmly in situ it is now
certain that nothing of the sort will ever happen again.
The downside of the affair is that it has become in practice the excuse for an
agricultural racket and hand-outs of onerous provenance and dubious delivery.
The Common Agricultural Policy (CAP), which began with the excellent idea of
protecting the countryside from depopulation by preserving small farmers, has
become, as everyone knows, a system of vast subsidy for agro-business and big
farmers. It also, by its import tariff regime and exclusion of extra-European
products, impedes the development of world trade and of the wealth of nations,
particularly Third World nations. Mozambique, for instance, could provide sugar
at a tithe of the price that Finland sells its sugar beet.
There are few people who would dispute the foregoing critique of the actual
reality of the EU, save obviously self-interested people such as President
Chirac of France, the greatest beneficiary of CAP. This is why there are grave
misgivings about admitting new members. Every new EU state adds to the financial
burden on Brussels, that is the communality of EU member-states.
With the foregoing reflections in mind, it is clear why there are reservations
about admitting Bulgaria and Romania right now among cognoscenti in EU affairs.
Bulgaria and Romania have so far failed to set up payment agencies for EU farm
subsidies and Sofia was also not ready to disburse the bloc's multi-billion-euro
regional aid. "If this is not remedied, the Commission may take measures to
... withhold payments to Bulgaria and Romania," the May 11th draft report
of the commission said.
Bulgaria and Romania missed out on the big wave of EU enlargement into former
communist Eastern Europe in 2004, when 10 new members joined, because they were
too slow in political and economic reforms.
Since the Commission's last progress report in October 2005, Romania has reduced
the number of red flags to four from 14 and Bulgaria to six from 16.
However, while Romania's shortcomings concerned technical issues such as a
computer system for tax collection, Bulgaria was told it must make urgent
progress in prosecuting organised crime and fighting corruption. This is the
rub. For it is much easier said than done. There is nothing like agreement
between the member states about Bulgaria's fitness to join at this time, since
the continuation of such outrages as contract killings, and rapacious illegal
levies at the borders, indicates that the Sofia government is not in control of
For instance, 52% of the Dutch polled recently oppose Bulgarian entry. Holland,
as a founder member of the club really counts, as its role in stalling the EU
constitution last year showed.
Russia "Limits" Negative Effects of Bulgaria, Romania EU Entry
There are those outside the club who have grave reservations about the
enlargement too. Russia would like to take precautionary measures to limit the
negative effects of Bulgaria and Romania's entry in the EU in 2007, Vladimir
Chizhov, Russia's ambassador to the EU was cited as saying on May 23rd.
In an interview for the Interfax Agency Vladimir Chizhov explained that Russia
wants to avoid the problem with the synchronisation "just as it happened
two years ago when the ten countries joined the bloc." We have a series of
fears concerning Bulgaria and Romania linked to the necessity of evaluation of
the active agreements. Some of them will have to be changed and some annulled,
Russia's ambassador to the EU added.
He also pointed out that the EU is an important, but difficult partner for
Russia. "Despite being partners, we are also rivals in view of economic
globalisation. The problems will continue emerging and the fight for markets
will go on," Chizhov said in the interview.
Chizov earlier talked to the Financial Times saying that EU's new member states
are spoiling Moscow's relationship with the bloc due to "phantom pains of
"With enlargement, the EU has not become an easier partner for us,"
Vladimir Chizhov told the Financial Times. "Some, not all, of the new
members have brought into the EU their own phantom pains - people who
concentrate on the sores of the past," he added.
Polish PM visits Bulgaria
Polish Prime Minister, Kazimierz Marcinkiewicz, recently made an official visit
to Bulgaria by invitation from Bulgarian Prime Minister, Sergey Stanishev.
Marcinkiewicz met with Bulgarian President, Georgi Purvanov, National Assembly
Chairman, Georgi Pirinski, and Stanishev, Sofia News Agency reported.
After the plenary talks between the official delegations, the two prime
ministers held a joint news conference at the Council of Ministers. The main
subjects of the talks in Sofia included Poland's support on Bulgaria's way to
the European Union, the development of trade and economic relations, and
cooperation in the field of military and power industry. Last year, trade
between the two countries stood at 426.8 million Euro, a 36 per cent rise
year-on-year. Imports from Poland in 2005 were worth 297.5 million Euro, or a 39
per cent increase compared to 2004. Exports of Bulgarian goods to Poland in 2005
stood at 129.3 million Euro, a 30 per cent rise year-on-year. According to data
from the Bulgarian National Bank, Polish investments in Bulgaria for the
1996-2005 period amounted to some six million Euro, including 5.5 million Euro
implemented in 2005. Preliminary information indicates that the largest share of
this sum rests with the Maspex Wadowice Group, which at the end of 2005 acquired
Litex Juice-Lovech. Investments have also been made in tourism and trade.
Kozludui NPP closure to cost Bulgaria 1.6bn Euro
The closure of Units 1-4 of the Kozlodui nuclear power plant reactors will lead
to a loss of more than 1.6 billion Euro for Bulgaria's energy sector, Economy
and Energy Minister, Rumen Ovcharov, told Sofia News Agency.
Additional sums varying between 250 and 750 million Euro will be lost due to the
inability of Bulgaria to export large amounts. An intradepartmental work group
with the council of ministers has concluded that after January 1st 2007 the
Kozlodui plant's exploitation costs may reach 590 million Euro. Additionally,
600 million Euro must be invested in other projects as well, in view of ongoing
reconstruction and modernisation programmes. Ovcharov admitted in Parliament
that the closure of blocks will lead to increases in electricity prices. These
higher prices will change inflation levels through expected price increases in
other goods and services.
According to government analysis, household incomes will decrease due to higher
electricity prices and will decrease consumption demand. The closure of the four
units is also expected to increase the workload of the Maritza East heating
power plants. This will create an environmental problem and create health risks
to those living close to the plants. Meanwhile, TVEL Nuclear Fuel Corporation
Executive Director, Vassily Konstantinov, said that Russia would continue to
store used nuclear fuel from the Kozlodui plant even after 2020, until the
exploitation period expires. Russian experts said that the Kozlodui plant and
energy blocks are safe and can still be used.
Russian, Czech bidders team up for Belene NPP
Russian company, Atomstroyexport, is considering teaming up with Czech
consortium, Skoda Alliance, to build Bulgaria's second nuclear power plant in
Belene, Sofia News Agency reported.
The two bidders may unite if the Bulgarian government decides to go through with
the project, Vladimir Porigin, head of the Atomstroyexport division for
construction of new NPP abroad said.
Bulgaria's government had to choose the cheapest option to finance and offer the
lowest electricity price, Porigin said. The procedure for selecting the
contractor allows tie-in between rival bidders. Porigin believes that the
National Electricity Company (NEC) in Bulgaria will be ready with its choice of
a contractor for the Belene plant construction by early June. The Bulgarian
government has decided to build two 1,000 megawatt reactors in Belene at a cost
of two to four billion Euro. NETC expects the first reactor to become
operational in 2012. The contractor's bids were introduced in early February.
Some 20 Bulgarian companies have notified AtomStroyExport of their interest in
becoming subcontractors on the Belene project, Porigin added.
The company will audit the candidates before making a selection. NEC even asked
Russian experts 800 questions concerning the technical and economic aspects of
the Belene NPP construction project. Russian Gazprombank is also a strategic
investor in the project, and the Russian government has granted a loan to
guarantee the financing of the Belene plant construction. Bulgaria Energy
Minister, Rumen Ovcharov, recently said Bulgaria will provide a 300 million Euro
guarantee for the loans that will be received from Euroatom and EIB for the
Belene NPP. The guarantee is a political move aiming to secure EU backing for
the project, Ovcharov explained.
The Belene project was suspended in the early 1990s due to cost overruns and
environmental concerns. By the time the building of the 1,000 megawatt
Soviet-designed plant was put on hold, some 40 per cent of construction works
worth 1.0 billion Euro had been completed, including the delivery of a Skoda
reactor. Atomstroyexport will also work together with Framatom, the company that
will deliver and assemble the equipment for the Nuclear Power Plant.
Korean tourists explore possibilities in Bulgaria
Members of the State Tourism Agency (STA) and the Bulgarian Association of
Travel Agencies (BATA) presented Bulgarian tourism products to representatives
of the 10 biggest tour operators in Korea, media and diplomats in the Bulgarian
embassy in Seoul, Sofia News Agency reported.
According to Korean data, the number of South Korean tourists in Europe exceeded
one million in 2005. As a result of the growing Korean interest in Europe, in
December 2005 Bulgarian Honorary Consul to Korea Kim Hi Yong established an
informal organisation including ambassadors of Bulgaria, Poland, Romania,
Slovakia, Serbia and Montenegro, Hungary and the Czech Republic. The aim of the
group is to explore possibilities for further development in relations with
Korea. The group works also in the area of tourism to attract South Korean
tourists to Central and Eastern Europe by offering tourist packages. Such tour
packages are common practice on the Korean tourism market. The initiative will
also inform Korean tour operators of many unexplored tourism possibilities in
Bulgaria, Romania, Slovakia and Serbia and Montenegro. Even countries with a
developed tourism policy like Poland, Hungary and the Czech Republic agreed to
take part in the programme, as it will give them the opportunity to increase the
number of South Korean tourists.