The European Union has not given up on the South Stream gas pipeline project and therefore the dialogue with Russia must continue, German chancellor Angela Merkel told visiting Bulgarian Prime Minister Boiko Borissov during talks in Berlin on December 15.
The talks took place two weeks after Russian president Vladimir Putin said that he was shelving the project, pinning particular blame on Bulgaria.
Ahead of the talks with Merkel, Borissov said that he would seek a clear position from the EU on the South Stream issue.
Merkel told Borissov that Germany had good experience with Russia as a reliable partner and had received assurances from Bulgaria that it too was a partner that could be trusted.
The German chancellor said that many contracts had been concluded and the most important thing now was to examine very carefully the legal side of the issue, which should be decided in compliance with EU rules.
“With the support of the chancellor, we expect that we will soon have clarity from the European Commission, what is required of us and what they will negotiate on our behalf, if they negotiate in Moscow,” Borissov said.
He said that he believed that he and Merkel were unanimous that the governments of Bulgaria and of Russia should continue their contacts and activities regarding South Stream, otherwise Bulgaria could be a defaulting party to the contracts, where there is no reference to Brussels as a party or to the Third Energy Package being in effect at the signature of the agreements in 2006,” Borissov said.
Borissov said that at the European Council in Brussels later this week, Bulgaria would present its idea to build a gas distribution hub in the country.
“Our proposal is precisely in the spirit of an energy union in the European Union – the gas to be in the ownership of the EU, and so this flow does not mean dependency, while through interconnectors, the gas is distributed in every direction,” he said.
Borissov said that it was difficult to explain to the Bulgarian people why gas, if it goes through Turkey and Greece, is good, but if it goes via the Black Sea to Bulgaria, it was not good. “Why if Nord Stream is good, South Stream is not good.”
Bulgaria continued to pay and to be taken to court over the Bourgas-Alexandoupolis project, Belene nuclear power station project and the extension of the lifespan of the fifth and sixth units of Kozloduy nuclear power station, “and now also over South Stream,” Borissov said.
Merkel pledged to Borissov that Germany would support Bulgaria in his country’s tough economic climate.
She promised to send German experts to Bulgaria to provide support for judicial reform, energy projects and the use of European Union funds.
“Bulgaria is in a difficult economic environment, it is important to co-operate very closely. In the coming months we will co-operate very intensively when it comes to investment projects, spending of EU funds, structural funds,” Merkel said after the talks in Berlin.
Merkel gave Borissov no guarantee that the issue of Bulgaria entering the EU’s Schengen visa zone would be resolved soon.
A succession of governments, including the previous 2009/13 one headed by Borissov, have insisted that Bulgaria is technically ready to enter Schengen.
But Bulgaria has been blocked by EU countries that point to unfavourable reports on the country under the Co-operation and Verification Mechanism (CVM) put in place by the European Commission when Bulgaria entered the EU in January 2007 to bring the country up to the bloc’s standards in the judiciary and law enforcement, notably against organised crime and corruption.
Recently, hopes have been pressed by senior members of Borissov’s 2014 cabinet that the country could enter Schengen in early 2015, probably by stages.
Bulgaria also has repeated its insistence that the question of being admitted to Schengen and the CVM process are two separate and unrelated processes.
But reports from the Borissov-Merkel meeting said that the German chancellor said that whether Bulgaria’s sea and air borders would be included in Schengen would be decided only in February 2015, when the next CVM reports on Bulgaria and Romania are due.
Merkel said that she had the impression that the new government “wanted to approach things that need to be improved, with more determination – such as the fight against corruption and organised crime”.
Borissov’s new government took office in early November 2014, after an interval in which the country was first under a caretaker cabinet pending May 2013 elections, then a Bulgarian Socialist Party-Movement for Rights and Freedoms ruling axis that left office after months of widely-supported public protests and electoral thrashings for the BSP, and then again a caretaker cabinet until a centre-right coalition cabinet was formed with mixed-bag party support in Parliament.
Borissov said that he had asked Merkel to extend by a further year the deadline for the absorption of EU funds from the previous budget framework.
He said that Bulgaria relied on European Commission assistance in the rapid provision of the billions lost by Bulgaria. Borissov said that Merkel said that she would consider whether Bulgaria also could use some of the opportunities, as Borissov put it, that the EC had given Slovakia, Romania and Greece.
A Bulgarian government media statement said that Merkel had promised that at the European Council, she would endorse the requests of Bulgaria and “see what could be achieved”.
A day earlier, on December 14, Borissov told the Bulgarian community at a meeting in Berlin that he that was hoping that Germany would declare readiness to help Bulgaria overcome the problems that had accumulated over the previous government’s (the BSP-MRF ruling axis from May 2013 to August 2014) term in office.
“Corporate Commercial Bank was deliberately bankrupted by the previous government. (Plamen) Oresharski, (then-finance minister Petar) Chobanov and (central bank governor Ivan) Iskrov are the people who caused and allowed the bank to go bankrupt”, Borissov said.
“This is why we started to repay people through the Insurance Fund. Two billion leva was needed so that people can get their money back. Moreover liabilities of the National Electricity Company amount to four billion leva,” Borissov told his audience of Bulgarians.
“In the meantime, there are millions of Bulgarian leva in unpaid contracts of municipalities. While for four years Berlin was giving our economic policy as an example to Europe and the world, the Oresharski government led to record debts and bankruptcies over the past year. This is the aftermath of the Oresharski experiment,” Borissov said.
With regard to the South Stream gas pipeline project, Borissov told the meeting that there was a signed contract for gas transmission, but no profit for Bulgaria.
Borissov said that up until now documents on the project had been deliberately kept hidden, but once the new government had been made familiar with all the agreements, it became clear that revenues from indirect activities would be larger than transit fees.
He told the Bulgarian community that he would raise the topic of the Northern and Southern Gas Corridors with the German chancellor and would insist on a clear position from the European Union on the South Stream case.