Although lacking a parliamentary majority, the new Socialist-led government of Bulgaria, is hurriedly reversing critical energy sector decisions of the previous center-right government, thus bringing the country closer to Russia. Within two weeks of the cabinet’s appointment, discussions are underway to reopen the Belene Nuclear Power Plant (NPP) project and speed up the South Stream natural gas pipeline project, which the previous government wanted to revise. Meanwhile, Russia proceeded with submitting materials related to its lawsuit against Bulgaria at the International Chamber of Commerce’s (ICC) International Court of Arbitration in Paris (BTA, June 7). Simultaneously, prospects for shale gas exploration under this government look even slimmer.
Bulgaria’s new Socialist-led government was elected on May 29 through political maneuvers and hangs by a thread. The Socialist party and its junior partner, the ethnic Turkish Movement for Rights and Freedoms (MRF), lack a majority in parliament as they gained together exactly half of the seats in the 240-seat National Assembly in the May 12 election. Although the former ruling Citizens for European Development of Bulgaria (GERB) won a plurality with 97 seats, it was unable to form a government for lack of a coalition partner.
The Socialist-led coalition received a lifeline from the ultranationalist Ataka party, which has 23 representatives in the National Assembly. The move was incongruous since Ataka has long proclaimed the Turkish party, MRF, to be its sworn enemy, using extremely negative and often hateful rhetoric, and adamantly refusing to support a cabinet with MFR participation. Furthermore, the ultra-nationalists supported the ruling GERB party in the previous parliament.
Nevertheless on May 29, Ataka’s leader Volen Siderov registered his presence in parliament to secure a quorum for the cabinet vote, although he and his party fellows later abstained from voting. GERB members of parliament (MP) voted against. The new government will need to solicit necessary votes from the opposition for each of its initiatives.
The new Prime Minister Plamen Oresharski, a respected economist, has been associated with opposing political forces in Bulgaria: he served as deputy minister of finance in the center-right government of Ivan Kostov in 1997–2001; became deputy chairman of the same party, the Union of Democratic Forces (UDF) in 2003; but subsequently switched alliances and served as minister of finance in the Socialist-led government of Sergey Stanishev in 2005–2009; followed by a mandate in parliament from the Socialist Party when it lost power in 2009. The Stanishev government was responsible for the massive misappropriation of European Union funds that led to a temporary suspension of several programs by the European Commission in 2009.
Following Oresharski’s appointment, the Russian newspaper Kommersant (June 5) commented that the new Bulgarian government is likely to “unfreeze” the Bulgarian-Russian energy projects abandoned by the previous center-right government of Boyko Borisov. The paper primarily named the Belene Nuclear Power Plant project, followed by the Burgas-Alexandroupolis oil pipeline. Kommersant noted that these bilateral energy contracts were signed when Oresharski served as minister of finance.
Indeed, Prime Minister Oresharski hinted that the Belene nuclear plant project might be reopened during his first TV interview as head of government (BNT, May 30). On June 5, Gennadiy Tepkyan, vice president of the Russian company Atomstryexport, tasked to build the Belene NPP, announced in Varna that Russia is ready to file all materials related to the ongoing lawsuit against Bulgaria for “illegally” abandoning Belene. The lawsuit against the Bulgarian National Energy Company requesting 1 billion euros ($1.33 billion) in damages was filed at the ICC Court of Arbitration in Paris in September 2012. Tepkyan, however, added in a conciliatory gesture: “If Bulgaria takes concrete practical steps, not just making declarations, the claim could be withdrawn.”
Two days later, materials on the lawsuit were submitted to the International Court of Arbitration as a Russian delegation led by Deputy Energy Minister Anatoliy Yanovsky was meeting with the new Bulgarian Minister of Economy and Energy Dobromir Stoynev in Sofia to discuss the Belene NPP project and the South Stream gas pipeline (Dnevnik, June 5, 7).
In the meantime, Oresharski remarked that since Bulgaria is likely to lose the lawsuit, it would be better off building the nuclear plant—a statement that caused a sharp reaction among pundits and the media (Deutsche Welle, June 8, Capital Daily, June 10). But on June 10, Energy Minister Stoynov announced that Bulgaria would file a counter-claim, outlining unpaid obligations by the Russian side (bTV, June 10).
The Socialist party presented the new Bulgarian government as “technocratic,” mainly to avoid taking political responsibility for its performance. This approach, however, creates confusion and also exonerates the government from responsibility. Many government ministers are indeed experts with a good professional reputation, whose opinions often clash with the Socialist party agenda.
One example was the series of statements on shale gas exploration by Environment Minister Iskra Mihaylova, an appointee of the Movement for Rights and Freedoms and a member of the parliamentary commission that explored the issue in the previous parliament. She stated that the moratorium on shale gas drilling imposed in January 2012 was caused by public mistrust in Bulgarian and EU laws. Expressing confidence in Bulgaria’s environmental legislation, she pointed out that the country could afford to launch shale gas exploration and assess potential environmental risks in the process, instead of banning hydraulic fracturing—the process for freeing natural gas trapped in underground shale rock formations (bTV, novinite.com, mediapool.com, June 3). But three days later, Mihaylova had to reverse this position announcing that the moratorium on shale gas exploration and production would not be lifted and shale gas would not be produced in Bulgaria. “The Council of Ministers never intended to lift the moratorium on hydraulic fracturing technology for oil and gas production,” she stated. Prime Minister Oresharski added that considering shale gas production opportunities is not among the government’s priorities (Bgnes.com, BNR, Focus Information Agency, Standart Daily, June 6).
As much as the Socialist party wants to promote the new government as technocratic, it is already clear that the cabinet will have to follow directions from the Socialist party leadership and the business interest groups around it, which prefer closer relations with Russia at the expense of Bulgaria’s energy independence.