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Bulgaria - Russia Relations

Bulgarias political, social and economic attitudes towards Moscow reveal how Russian foreign policy undermines European solidarity. In November 2006, Vladimir Chizhov, Moscows ambassador to the EU, famously called Bulgaria Russias would-be Trojan horse in the EU. Although Bulgaria has long been regarded as the European country most vulnerable to Russian influence.

Bulgaria's ties to Russia run broad and deep, NATO and EU membership notwithstanding. Energy dependence, cultural proximity, and historical links have all contributed to a generalized sense of affinity with Russia. That, combined with the small state syndrome, has traditionally led many Bulgarians to conclude that the best way to deal with Moscow was to give in when pressed and otherwise stay out of the way.

In December 2005 a Gazprom representative gave Prime Minister Stanishev "an ultimatum" to either renegotiate the current agreement on the purchase of natural gas or face a cutoff. In face-to-face meeting with Stanishev that day, Gazprom vice-chairman Alexander Medvedev reportedly waved his finger in Stanishev's face and told him bluntly that Gazprom would also begin routing its gas through neighboring countries, thus denying Bulgaria transit fees, if Bulgaria did not agree to begin paying market prices for Russian gas by this spring. The current agreement, which allowed Bulgaria to purchase Russian gas at below-market prices, did not expire until 2010. Bulgarian officials linked the Russian pressure at least partly to Moscow's unhappiness over Bulgaria's stated willingness to host US military facilities. Russia was clearly trying to pressure Bulgaria by using its near-monopoly position in the Bulgarian energy market as a lever. Medvedev's behavior toward the Bulgarian PM was dismissive and arrogant.

Bulgaria received gas at below-market prices under the current in-kind fee mechanism for the transit of Russian gas. In return for the transit of gas, Bulgaria paid USD 82.5 per 1000 cubic meters of gas. The transit fee was fixed at USD 1.678 per 100 km for every 1000 cubic meters of gas. With a length of 280 km, the pipeline passing through Bulgarian territory generates USD 4.68 per 1000 cubic meters of transited gas. In 2004, the state-owned Bulgargaz transited about 13.5 billion cubic meters of Russian gas to Turkey (11.5 billion c.m.), as well to Greece and Macedonia (1.8 billion c.m.). Under Gazprom's new proposal, Bulgaria would receive USD 62.24 million in cash for transiting a similar amount of gas. However, due to the in-kind fee and the lower fixed price of gas per cubic meter (82.5 USD), Bulgaria now receives a total of 750 million cubic meters of gas as transit fees, worth approximately USD 135 million at market prices. Thus, Bulgargaz stands to lose about USD 72.5 million a year under the new agreement.

The perception in Bulgaria is that the Russians hold all the cards on energy. Simply saying no to South Stream or reducing the issue to a black and white contest between Nabucco and South Stream is a losing proposition. In the absence of a coherent EU policy, the mad scramble to cut separate deals is precisely what Moscow wanted. Energy is only one of many ways in which Russia interferes in Bulgarian domestic political and economic life. It has increased its role in the Bulgarian banking system and real-estate market. Russia exerts a firm influence by generously funding Bulgarian media both at local and national level.

The 2008 crisis in Georgia began to rouse the normally reticent Bulgarian mindset and prompted some to question whether Russia's ultimate objectives might prove intolerable. Like many Europeans, the Bulgarians shy away from taking on Moscow in a direct or public manner, but they may prove willing to take additional practical steps to help shape an increasingly strained relationship between Russia and Europe. It is possible that Georgia may be changing the equation, at least for some. Putin's blatant effort at regime change in Tbilisi, apparent meddling in Ukraine, and increasing rhetoric about restoring imperial reach throughout the former Soviet space all came together in a poisonous cocktail. And, while the Bulgarians were clearly not ready to break the glass, they are increasingly reluctant to drink. Bulgaria supported the US bid to offer NATO's Membership Action Plan to Georgia and Ukraine because they judged it would enhance Bulgaria's security. That same calculation was now at work in reverse -- if those Black Sea neighbors were destabilized that would accrue to Bulgaria's significant disadvantage. The Bulgarians feared that Ukraine was already besieged by disintegrative forces.

The Bulgarians will not pony up money for economic reconstruction in Gerogia; they had little to give. But Bulgarian ports (Varna and Burgas) have regular ferry service to Georgia and can be the jumping off points for any EU bulk trade and for communications nodes. Liberalizing EU customs and tax regimes with Georgia, building new communications links, air services, and visa regimes are all EU decisions, but Bulgaria is the closest EU state to Georgia and would be a natural launch pad for such initiatives as it would stand to gain the most. Bulgaria was one of Georgia's largest arms suppliers. Observers didn't expect any quick resumption, but the issue was not off the table. Bulgaria will not take the lead now or in the near future. But they are increasingly uncomfortable about the future and are open to practical advice about how best to channel Moscow away from nationalist revanchism while helping pull Georgia westward.

The International Court of Arbitration at the International Chamber of Commerce in Geneva ruled 16 June 2016 in favor of the Russian Atomstroyexport company, a subsidiary of state-owned nuclear energy corporation Rosatom. Atomstroyexport's dispute with Bulgaria's National Electric Company was over the termination of the project of Belene Nuclear Power Plant. "Atomstroyexport will receive 620 million euro [almost $700 million] from Bulgaria," the spokesperson told reporters. In 2011, Atomstroyexport sued Bulgaria after it scrapped the Belene project for which the Russian company had won a tender.

Bulgaria's Prime Minister Boyko Borisov is the furthest one can get from being the Kremlin's puppet. In fact, he is one of the most anti-Russian politicians in the country's political elite. Borisov's track record definitely proved this. While in power, he managed to "bury all major bilateral projects" with Russia.

The 1936 Montreux Convention Regarding the Regime of the Straits prevents any non-Black Sea nation from permanently stationing its naval forces in the Black Sea, limiting their presence to not more than 21 days. For this reason, only three NATO members, Bulgaria, Romania and Turkey, could have taken part in creating the bloc's permanent fleet in the region. NATO's leadership welcomed the initiative, spearheaded by Romania. Representatives from the three countries are said to have discussed the issue for months and the talks appeared to be fruitful until Bulgaria dropped out of the project. "I do not need a war in the Black Sea," Bulgaria's Prime Minister Boyko Borisov said on 16 June 2016. "To send warships as a fleet against the Russian ships exceeds the limit of what I can allow," he added.

The Russian embassy in Sofia is rumored to have provided funding to Bulgaria's extreme nationalist "Ataka" party, which was leading a PR campaign against the proposed joint US bases. Ataka MPs met with Russian embassy leadership at the invitation of Potapov. The meeting was a result of "the Russian mission's interest in the breakthrough of Bulgaria's newest parliamentary party and its leader." Russian diplomats reportedly noted the fact that "Ataka is the only party in Bulgaria's parliament that envisaged new policies with regard to relations with Russia." Questions remained about Ataka's sources of funding, with speculation ranging from organized crime groups to former members of the communist-era security services to third countries.

Moscow still had important supporters in Sofia, mainly from within the ranks of the biggest opposition party in parliament - the Bulgarian Socialists. Bulgarian Prime Minister Boyko Borissov's statement in early July 2015 sounded almost apologetic: "It's understandable that President Putin spoke very sharply with regard to Bulgaria. But we have been wrongfully accused, because it is not our wish, and not our goal to freeze relations with Russia." Borissov was referring to economic sanctions against Moscow, for which Bulgaria, in its capacity as EU member, is partly responsible. More specifically, he was answering Putin's statement in Ankara at the start of December 2014, when he unexpectedly announced the end of the South Stream gas pipeline project - a project that was very important for Bulgaria. Putin put the entire blame for the failure of the project at Bulgaria's door, saying that the country was not in a position to "act as an independent state."

The Bulgarian Socialist Party nominated its candidate for the first time. Major General of the Reserve Rumen Radev, who had never been a party member. The Bulgarians faced an opportunity to choose a president who would wish to support friendly relations with Russia and not to kowtow to the EU and NATO. Will Bulgaria make use of this chance to become a sovereign country? Or will there be deployed an extensive demonization program of the candidate from the Left forces Rumen Radev? He believes though that one shouldn't invent an enemy in the person of Russia.

Bulgarias ties with Russia soured after the start of the Ukraine crisis in 2014 when the European Union accused Moscow of meddling in Ukraines domestic affairs. Russia denied having a hand in the eastern conflict. "Bulgaria must have an independent foreign policy. Bulgaria must follow its own objective. We lost a lot by more or less declaring Russia our enemy," Maj. Gen. Radev told Darik News on Saturday. The former air force commander said it was time for the Eastern European nation to look for friends, rather than enemies, especially for economic and trade partners. Russia could become a lucrative market for Bulgarian companies, he noted.

Bulgarians went to the polls on November 6 to elect a new president. Radev was endorsed by the Bulgarian Socialist Party (BSP). Boyko Borisov announced 13 November 2016 that he would step down as Bulgarian prime minister. His resignation was prompted by the victory of Socialist ally Rumen Radev in the second round of the presidential election. Radev's election as president could see Bulgaria strengthening ties with Russia, potentially putting the country at odds with its European Union and NATO allies.

By January 2017 Russia-friendly Radev was expected to appoint diplomat Radi Naidenov, currently Bulgarias ambassador to Germany, as interim foreign minister as he sought to reaffirm Sofias commitment to its allies in the European Union and NATO. Radev said that Donald Trump offers hope for an improvement in relations between Russia and the West. He also called for EU sanctions on Russia to be lifted and said that Crimea, annexed by Moscow in 2014, is de facto Russian, during his election campaign.

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