LITTLE BIG RUSSIA

by Milena Hristova, Gus Worth

Bulgaria's entente cordiale with Russia flourishes under the current government even though Bulgaria is now in both the EU and NATO

One of the things that often surprise foreigners on coming to Bulgaria is Bulgarians' attitude to Russia. Go to any former Russian satellite state and they invariably hate them. A Russian friend in Ireland tells how he pretended to be Bulgarian so he could fit in with a mostly Latvian and Romanian workforce who despised Russians. Not so with Bulgarians. The reasons are complex and historical, but one of them – the liberation from Ottoman rule – stands out. No attention is paid to the fact that Russia's interests at the time were strategic – about getting a line to the Dardanelles and the Bosporus to cut off Turkey's power.

Russia's connection to Bulgaria has always been close – starting with the Cyrillic alphabet, two world wars, Communism, the creation of Yugoslavia and, in modern times, everything from mafias, music stars and energy links.

Obviously, Bulgaria has struggled with being independent. It has been reluctant to shake off its Communist past. In the 1990s, economic difficulties brought in the IMF and the World Bank to harness the economy and the financial system. The Americans are putting an army base in Novo Selo in the south. It seems as if Bulgaria is unable to come to terms with its own sovereignty. Former President Putin of Russia made agreements this year with Bulgaria for the South Stream gas pipeline, which would run under the Black Sea from Russia to Bulgaria, where it could branch off in several directions. Additionally, a contract has been signed for building a second nuclear plant at Belene, and there is the Burgas-Alexandroupolis oil pipeline, which will carry Russian oil from the Black Sea to the Aegean, bypassing the busy Bosporus.

So what about Bulgaria's virtual dependence on Russia for oil, gas and nuclear fuel? "This is an area for concern," says Marin Lesenski of the Bulgarian Open Society Institute, an NGO dedicated to promoting openness, freedom and forging strong links between government and people. "Bulgaria and its EU partners should launch alternatives as soon as possible – such as the Nabucco gas pipeline, which would deliver Caspian and Central Asian gas – to escape the trap of energy dependence. Of course these agreements are not aimed exclusively at Bulgaria, but are part of a broader framework in which Russia is trying to dominate European energy supplies. The EU's logic, however, is that the dependence runs both ways – Europe is as dependent on Russia's energy supplies as Russia is on Europe's markets and hard cash."

While Russia is presumably happy to exploit its good working political relationship with Bulgaria in order to gain a toehold on the lucrative EU market, this is also a reflection on the fragmented way that the EU conducts business, finding it very difficult to come up with a common policy. In Lesenski's assessment Bulgaria needs to assert itself more strongly, to accept the stronger hand that it has through its membership in NATO and the EU. "When you are a member of these premier league organisations, this should mean something and you should be able to capitalise on that."

Because the exact parameters of Bulgaria's agreements with Russia were not made public, it is difficult to know what the costs and benefits will be. However, one area Lesenski feels gives grounds for concern is the fact that once again these projects will not be under Bulgarian control. "Bulgaria and Bulgarian companies will not have the main role either in financing or in construction. This means they will be dependent on decisions taken by someone else. And of course there is also the danger of hidden costs, land acquisitions and so on, which could lead to significantly higher costs. The problem for Bulgarian taxpayers is what financial commitments have been made."

All this has led to Russia's increasingly becoming a major player once again in Bulgaria's future against the wishes probably of the majority of the people. But why the large wave of US investments didn't materialise? In Lesenski's view, at the moment direct foreign investment favours the United States by 3.5 to 1 in comparison with Russia, according to 1999-2007 statistics. Russia accounts for only 10 percent of Bulgaria's foreign trade. These figures will obviously jump dramatically if the three energy projects come to fruition."

If we are talking about dependence, Bulgaria's economy is tied far more strongly to that of the EU, of which it is an integral part. If we should worry about something, it is Bulgaria's huge trade deficit with Russia, which is due almost entirely to energy imports. With the current rise in energy costs, this deficit will continue to grow and something has to be done about it," according to Lesenski.

There is nothing intrinsically wrong with dealing with Russia or its companies, says Lesenski, citing LUKoil as a good example. "It provides 25 percent of Bulgaria's tax revenue and has not been a cause for concern. As long as business practices are fair and transparent, and arbitrary policies are not imposed, Bulgaria should not be worried."

Yet in the context of Bulgaria's EU membership, such a close relationship presupposes potential areas of both conflict and common interests. The EU is struggling to achieve agreed policies and this would mean that Bulgaria's bilateral agreements can lead to it being pitted against the EU. However, the EU does recognise Russia's interests and works with it across many areas. The point to be made is that the EU and Russia also share common interests, neighbourhoods and goals, and these lead to interconnections, not just in the fields of energy and security but also, among others, in trade and environmental issues. Globalisation has brought about new challenges, and Bulgaria will benefit from a common EU foreign policy and actions.

The difficulties lie in the areas of friction between the EU and Russia. Russia is opposed to the expansions of both the EU and NATO and would like to increase its own influence throughout Europe. There is a similar situation regarding relationships with the United States – many areas of agreement and cooperation but also serious areas of friction. This is a potential web, but for Bulgaria these interests are clear.

"Obviously," Lesenski says, "the current government coalition is very friendly to Russia and this factor has played a major role in reviving the relations with it – by means of the signed energy agreements as well as with the accompanying symbolic gestures such as proclaiming 2008 to be the Year of Russia in Bulgaria." Whereas older people have direct memories and these affect their thoughts and decisions, the young see only the freedom that they now take for granted.

Another big question is who will be the next president of the United States. This area Marin Lesenski considers to be a "win-win situation." The phenomenal interest around the world in the US primary elections shows also how much Europe cares about events across the Atlantic. Either candidate, he believes, will have the "respect and affection of Europe" and there is a prospect of a new beginning after the rift that occurred around the war in Iraq. The new president will have the opportunity to heal the wounds that the Bush administration inflicted and move to re-capture the image of the United States as the supreme advocate of "soft power" – the subtle attractiveness of values and a culture that are moving in to dominate. In this area the United States has the real lead and it is hard to see how Russia can reciprocate. Russia may succeed in brokering some nice energy deals, win more influence over its neighbours and gradually regain its place at the top table, but it will never be able to stand up to Hollywood. So Bulgaria should better stick to Russian songs.

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