Bulgaria’s foreign and economic policy priorities torn between Europe and Russia

Teodora Kamenova

It has been only a few months since the start of his mandate, but Prime Minister Boyko Borisov has already met with some of the most influential world leaders. As a result of the deepening economic crisis in Bulgaria, he had an extremely intense agenda to present to his colleagues: from asking for assistance and support to canceling contracts and agreements made by the previous government. What is the outcome of this new foreign policy and does it point to a solution for a number of problems that the new Bulgarian government is facing?      

One of Borisov’s first meetings was with his Russian colleague Vladimir Putin. This summit was an attempt for both leaders to find a common ground mainly with regard to pending energy projects. However, the results were quite ambiguous: Bulgaria demonstrated much hesitancy regarding its future plans, and Russia did not show much patience towards the new government and stated that it has other options for realizing projects such as “South Stream”, “Bourgas- Alexandropoulos” and the “Belene” nuclear plant. During the meeting Borisov asked for more time to decide on these issues, something which allowed him to look for more possibilities which correspond to the financial situation of Bulgarian in the mid-term.

The next two meetings demonstrated a smooth turn westwards and an attempt to look for other alternatives. Borisov’s visit to Paris had a similarly intense agenda but seemingly a friendlier atmosphere in comparison to the Gdansk meeting. France which holds the 15^th place in the ranking for direct foreign investment in Bulgaria¹ is considered to have much more potential in that sphere of economic relations and so the premier’s initiative was really of strategic significance for the economic interests of Bulgaria.

The Bulgarian government sees a possibility to increase French investment in a number of sectors, among which: energy, infrastructure, water and waste management, organic farming and wine production². It was precisely in the first sector, and more specifically regarding the “Belene” nuclear plant, that Sofia sought Paris’ cooperation. Sarkozy vowed to look into the issue, which was welcomed by the Bulgarian government which is ready to decrease its share in the plant to 20-30% as long as it can find financing for project. Whether French business will be interested in the offer is still unknown, especially when having in mind their experience with the new government thus far: the economic crisis had the latter cancel a contract for purchasing two French warships- something which is unlikely to have produced a positive reaction.  

The second meeting which signals for a new direction in Bulgaria’s foreign and economic policy was the visit of Italian Prime Minister Silvio Berlusconi. During the visit Berlusconi vowed to lobby for the EU to unlock 7 billion euro from its funds and to compensate Bulgaria with an additional sum of 300 million euro for its compliance with European directives and shutting down two nuclear reactors from its current nuclear plant. Naturally, if this happens it would be of major help for GERB’s attempts to balance the state budget. Italy is also an important trade partner for Bulgaria, ranking third after Germany and Greece, with trade between the two worth of more than three billion euro. Although the trade balance for 2008 is negative (-698.8 million), Italian investment for the period of 1998-2008 makes the country the fifth largest investor in Bulgaria³. However, the two countries have an opposing opinion on one particular issue: the South Stream project, a decision which Bulgaria managed to postpone at the meeting with Russia.  

Italy is one of the strongest proponents for the project and will most certainly ask Bulgaria to take some steps towards its realization. As a result, while trying to switch course westwards, the Bulgarian government is once again faced with the dilemma of how to stand by its economic interests in an increasingly interdependent world. Meanwhile, French company GDF Suez cancelled its participation in South Stream and announced that it will probably join the rival Nabucco project. Thus, Borisov’s meetings with Sarkozy and Berlusconi point in totally different directions with regards to energy policy.

With a deepening economic crisis in the background, the new Bulgarian government is trying to find more opportunities to defend its economic interests and to shape its energy policy. The meeting between Putin and Borisov a month ago had seemingly changed policy direction towards Western Europe. Signals coming from there are optimistic but do not offer an easy solution for the problems Bulgaria is facing. Dialogue with France and Italy is of great significance for the country’s economic interests but it is unlikely to be a guarantee for a new energy policy at this early stage. The meeting between Bulgarian and Russian experts regarding the pending energy projects is planned for November and this is too soon for Bulgaria to come forward prepared with a new policy completely different from its previous one. Although, the country had not managed thus far to equip itself with a Western safety net, in the long term its new foreign policy signals for a desire for broadening its economic perspectives and the countries it cooperates closely with. Regardless of what course it decides to take, there will always be some tension related to its ways of pursuing its economic interests and how that will be perceived both by Western Europe and Russia. Finding the right balance seems to be the greatest challenge ahead.

¹  Ministry of Economy, Energy and Tourism;
²  Ministry of Economy, Energy and Tourism;
³  Ministry of Economy, Energy and Tourism;

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