Bulgarian politicians divided on Putin’s South Stream announcement – reactions (updated)

Written by on December 2, 2014 in Business - Comments Off on Bulgarian politicians divided on Putin’s South Stream announcement – reactions (updated)

The first reactions from Bulgarian politicians on Russian president Vladimir Putin’s surprising announcement that Moscow would shelve the South Stream pipeline were predictably uneven, given the existing divide in Bulgaria about the benefits of the proposed project.

Putin said, during a visit to Turkey on December 1, that Russia could not push ahead with construction because Bulgaria was yet to issue a construction permit for its stretch of the pipeline, saying that “Bulgaria was deprived of the opportunity to act as a sovereign country” and implying that it was the European Union’s fault that the pipeline could not be built.

Bulgarian President Rossen Plevneliev sought to rebuff any criticism directed at the authorities in Sofia, saying that the project was always going to be a matter of discussions between Russia and the EU, rather than Russia and Bulgaria.

“The decision on [the future of] South Stream can only be made between Russia and the EU. The countries interested in South Stream have carried out very serious preparations and also mandated the European Commission to negotiate with the Russian government to make a decision on this project,” Plevneliev said on December 2, as quoted by Focus news agency.

“I disagree with the thesis that there is a confrontation. This is one of many projects that could be implemented within the EU and only if it meets EU regulations. The EU is a union based on the rule of law. I regret that Russia is showing that ‘might is right’ in the Ukrainian crisis, but when we observe the rule of law, any project, small or large, will happen. I believe that no one will reject South Stream in the EU if Russia shows willingness to abide by EU rules,” he said.

Bulgaria’s Deputy Prime Minister Tomislav Donchev said that the accusations that Bulgaria had prevented South Stream from being built were inappropriate. Bulgaria had to stop all work on its stretch of the pipeline because of the infringement proceedings launched by the EC on suspicion that the now-departed Plamen Oresharski administration breached EU rules on public procurement in awarding the construction contract.

Donchev said that Bulgaria was concerned by this new development and would take a pro-active stance, but would not pursue unilateral talks with Moscow because the issue was a European one and should be dealt with at EU level. He welcomed any help from the EU to build additional gas grid connections with neighbouring countries, but said that such measures were not enough to compensate the losses from the cancellation of South Stream, leaving open the prospect of future litigation.

Bulgaria’s Kristalina Georgieva, the European Commission vice president, also sought to defend Bulgaria and the EU of any blame. “Let us remember that the EC has always had a very clear position on South Stream, namely that the construction of new pipelines in Europe must be in line with EU laws,” she said, as quoted by private broadcaster bTV.

“This position is well known to the Russian side and did not change yesterday, so it cannot be the reason for this decision. […] Bulgaria is a sovereign country that makes decisions in the best interests of its citizens. The request to allow access of third-party gas traders is in Bulgaria’s interest,” Georgieva said.

EC’s main objection to South Stream has been that the pipeline breaches the provisions of the Third energy package, which bans gas traders like Gazprom from owning pipeline infrastructure and requires that half of any pipeline’s capacity is made available to third-party suppliers.

In his announcement, Putin said that Bulgaria was giving up on 400 million euro a year in lost revenue from transit fees, suggesting that Sofia should seek compensation from the EU now that South Stream was cancelled.

Former economy minister Traicho Traikov said that “if anyone blames Bulgaria, they might have to face international arbitration”, the implication being that any future lawsuits by Sofia would be directed against Russia. Economist Vladimir Karolev, recently appointed adviser to Economy Minister Bozhidar Loukarski, also said that Bulgaria should seek international arbitration once the project is officially confirmed as cancelled.

Loukarski himself said that “the South Stream project is not over, as far as I’m concerned, until we see the official Russian position”.

Former ambassador in Moscow Ilian Vassilev, an outspoken opponent of the project, told Bulgarian National Television that Putin’s announcement was a “political declaration” that sought to create dissent within the EU, as well as spur anti-EU sentiment inside Bulgaria. He said that the real reason for the project’s cancellation would be the rising costs, caused by the continued depreciation of the Russian currency and Gazprom’s plans to build new pipelines to China.

MP Martin Dimitrov from the Reformist Bloc, who is deputy chairperson of Parliament’s energy policy committee, made the same point, as quoted by Bulgarian National Radio (BNR). “You will see now how [Bulgarian] parties speaking with the same voice as Putin will claim, nearly hysterically, how bad the European Commission is and how Bulgaria is losing enormous amounts of money. But the conditions set by the EC for South Stream are the conditions defending Bulgarian interests,” he said.

Political analyst Ognyan Minchev, another opponent of South Stream, told private broadcaster Nova Televizia that any criticism from Putin towards Bulgaria was misplaced and should Russia indeed halt the project, it would be good news for the EU because it would prove that “laws are being followed inside the EU”. He said that any claims of lost revenue were misleading and that Bulgaria lost much more in terms of political stability and transparency as a result of Russia’s pressure on Sofia to build the pipeline.

Among the project’s supporters, the news was greeted with dismay, with former socialist economy minister Dragomir Stoynev saying, as quoted by BNR, that Bulgaria should not give up so easily on South Stream.

Another former socialist economy minister, Roumen Ovcharov, told Nova Televisia that Bulgaria was losing $600 million, but would also suffer “geostrategic and political losses”. Socialist MP Zhelyo Boichev, on the Nova Televisia breakfast TV show, said that he was disappointed and described the actions that led to the cancellation of the project as “a betrayal of future generations”.

Socialist leader Mihail Mikov said that his party was prepared to contribute in every way possible to bring South Stream back on track and vowed that the opposition would support all government efforts to implement the project. He rejected claims from the pipeline’s opponents that the benefits to Bulgaria from building South Stream were uncertain.

(This report has been updated with Deputy Prime Minister Tomislav Donchev’s comments at a media briefing. South Stream official first welding ceremony in Bulgaria, in October 2013. Photo: gazprom.ru)

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Alex Bivol is the news editor of The Sofia Globe.