Czech media: government urged to help CEZ in Bulgaria

Written by on February 22, 2013 in Bulgaria, Business, Europe, News - No comments

Czech Republic’s president-elect Miloš Zeman has criticised the country’s cabinet for not doing enough to defend the interests of state-owned energy company CEZ in Bulgaria, Czech news agency ČTK reported.

“[The government] should use all contacts in the European Union, use all arbitration mechanisms, but also start bilateral negotiations,” Zeman was quoted as saying on February 21.

In reply, foreign minister Karel Schwarzenberg said that he had spoken with his Bulgarian counterpart Nikolay Mladenov, but that any diplomatic efforts needed to be discreet. He said that his ministry was working on the issue and would make further announcements when tangible results were achieved.

CEZ owns one of Bulgaria’s three electricity distribution companies, whose activities are now under spotlight after high electricity bills for January sparked protests throughout the country, now in their second week.

Some protesters have even called for the nationalisation of the three companies, a request that Bulgarian Prime Minister Boiko Borissov flat-out rejected on February 19 because it would cost the Bulgaria state too much. (A day later, Borissov resigned, opening the door to snap elections, as a result of the ongoing protests.)

All three electricity distribution companies – Austria’s EVN services southern and southeastern Bulgaria and Czech private firm Energo Pro bought E.ON’s business in northern and northeastern Bulgaria last year – were fined by Bulgaria’s State Energy and Water Regulatory Commission (SEWRC).

CEZ has had the most fines, 21 in total against its two Bulgarian units, and the regulator has opened proceedings to revoke CEZ’s licence in Bulgaria. The company has denied any wrongdoing and said that it was prepared to take the issue to court if its licence were to be revoked.

SEWRC will hold a meeting on April 16 to ascertain whether CEZ has implemented its recommendations and would then decide, at a later date, whether to revoke the licence.

Zeman is not the first Czech politician to criticise the government in Prague on the issue. Outgoing president Václav Klaus said on February 20 that the cabinet’s reaction was “unacceptable”.

On February 19, Czech prime minister Petr Nečas said that he expected Bulgaria, as a EU member state, to comply with international law, specifically the convention on protection of investment. He said that CEZ was caught in the middle of a political dispute and that the protests against high electricity prices had become politicised.

Trade and industry minister Martin Kuba went even further, describing the situation as “unprecedented” and saying he would take the issue to the European Commission, but was later rebuked by finance minister Miroslav Kalousek, who said that Kuba was not authorised to speak on behalf of CEZ.

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