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Bulgarian report Bulgarian report
by Euro Reporter
2013-10-13 12:02:14
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EU Crisis Made Bulgaria Look Eastward

Former Bulgarian Foreign Minister Ivailo Kalfin says that the reason that Bulgaria was not affected directly by Eurozone crisis was the mere fact that his country is not a member of the Eurozone and does not use Euro. He also says that the crisis made the Bulgarian businesses to look for new partners in the East. Kalfin was the minister of foreign affairs of Bulgaria and deputy prime minister from 2005 to 2009. He is currently a member of European Parliament where he is serving as the Vice-chairman of the Committee on Budgets. From 2002 to 2005, he was an economic advisor to the President of Bulgaria, Georgi Paranov.
Following is the exclusive interview with Mr. Kalfin in which Tehran Times’ Kourosh Ziabari answered some questions about the current economic and political situation in Bulgaria.


Dr. Kalfin; how has the Eurozone crisis affected Bulgaria? Such countries as Greece, Portugal and Spain faced great economic difficulties and were forced to adopt austerity measures. How has Bulgaria confronted the repercussions and consequences of the economic crisis in the Eurozone? Is your country facing the unemployment crisis which has caused great troubles to some of the EU member states?

The Eurozone crisis didn’t affect Bulgaria directly, first because Bulgaria is not a member of the Eurozone and we don’t have Euro, and second because we have had very disciplined and prudent fiscal policies for more than 10 years. So Bulgaria didn’t accumulate debt. Our debt is one of the lowest debts in Europe, and we didn’t have to make a huge deficit in the budget. But still the economy was affected through a much slower growth and higher unemployment which is higher than the average European level.

How has Bulgaria’s trade with the countries in the Eurozone suffered as a result of the economic crisis these countries were experiencing? Has Bulgaria undergone economic and financial difficulties as a result of the crisis its EU trade partners faced?

Basically the economic crisis has affected Bulgaria’s exports more. As a result of the economic crisis, Bulgaria’s imports and exports diminished very much and the economy was slowed down. Bulgaria’s economy is very much oriented towards the European Union. More than 60% of the trade is done with the European Union and that’s why when there’s a slow-down in Europe, there will be an immediate slowdown in the Bulgarian economy. That made Bulgaria’s businesses look for other alternatives and other markets and diversify its trade partners.

Which countries are currently the major trade partners of Bulgaria outside the European Union? Do you have regular trade ties with such countries as China and Russia, as well?

Outside the European Union, the major trade partner for Bulgaria is Russia. We import quite a lot of energy sources, including gas and oil. The other major partner is Turkey which is a neighboring country of Bulgaria. With Turkey, we have a high turnover in terms of imports and exports. We have also trade ties with China and mostly import goods from China. We also exported some traditional Bulgarian products to China which was done with some difficulties last year, but it’s still going on. In Central Asia, the market for Bulgarian goods is developing slowly, so again the EU crisis made the Bulgarian businesses look much more eastward.

It was on the news that Bulgaria is currently facing an immigration crisis as more refugees from the crisis-hit, war-torn Syria are moving to the European countries like Bulgaria. I also read that the head of Bulgaria’s refugees department was fired amid the growing influx of Syrian to the country. How is Bulgaria going to tackle the problem of Syrian refugees? Do you have the sufficient facilities to accommodate them?

We have a problem because all the facilities that Bulgaria has are in a normal level for the normal inflow of refugees which is around 1,000 to 1,500 and the accommodation centers are mostly booked and we don’t have anything beyond that. Currently in Bulgaria, there are nearly 6,000 refugees and about 70% of them are coming from Syria and what is the concern is that every day we have between 60 and 100 people crossing the borders and coming to Bulgaria. This is going very much beyond the possibilities of the country, not only in providing shelter and food for this people, but in taking measures that are needed including medical checks, interviews and other helps. This is too much and an excessive burden for Bulgaria. It’s a huge problem for the country now.

In the first months of 2013, Bulgaria has been witness to widespread protests against the high electricity and hot water bills and government-granted monopolies which finally led to the resignation of Prime Minister Boyko Borisov and his cabinet members. How has Bulgaria tackled this crisis? Are people now content with the electricity and water prices? Has the new government adopted reformed and revised policies in granting the power provision privileges?

The problem in Bulgaria is not much the high price of electricity, but the low income of the people, because if you compare the electricity prices in Bulgaria with the other members of the European Union, we have one of the low prices. But still for this income and salaries of the people, the electricity prices are high. And in last year, we had a lot of public protests because the previous government had kept down the incomes for four years, and it was really very difficult for the people to pay the electricity bills. Now, with the new government, the incomes have moved upward but we have a structural problem in Bulgaria that we have to put more efforts into energy efficiency and the diversification of the sources of energy. One of the reasons for the high prices of energy is the excessive use of renewable energies which are very expensive. So now, these balances are being made slowly, but the lasting solution will be the increase of the income of the Bulgarian citizens.

The fossil fuels cannot be considered as reliable and trustworthy sources of energy. They will finally shrink and come to an end, even if they can meet our demands and needs for two or three centuries. What are the major plans of the EU countries and Bulgaria in particular for deriving benefit from the renewable, green sources of energy and replacing them with the traditional receptacles of energy?

Besides the fossil fuels which we have traditionally had in Bulgaria for many years, we have the nuclear energy. We have a nuclear power plant with two blocks which are producing a substantial share of electricity in Bulgaria, and it is on a very good competitive price. A long-term solution is the introduction of renewable resources, but again in order to stimulate investments, the consumers have to pay a much higher price. So, they have to be introduced gradually in order not to boost the prices of electricity. But now I would say that in Bulgaria, we have about 18-19% of renewable energy from all the energy consumed totally, the same percentage comes from the nuclear power plants and the rest is produced using the fossil fuels.

Bulgaria has a relatively good and promising human rights record. Last week, it was elected by the UN General Assembly as the chairman of the Third Committee of the Organization which deals with thematic issues of human rights and the status of human rights in different world countries. What is the significance and importance of this election? How does it contribute to the improvement of Bulgaria’s international stature?

The Third Committee in the United Nations is a visible and very important committee and there are scientific issues which would be discussed there. So the chairmanship of Bulgaria which is a rotating chairmanship is going to be very important. Otherwise, in Bulgaria we have accomplished high standards for the human rights in a democratic atmosphere in the European Union. We still have some issues such as press freedom, but it’s not simple very much because the problem with the press is the economic crisis and the media have a difficult access to market in Bulgaria, so again, going in that direction, I think that we can improve but we should say that Bulgaria is meeting high standards of human rights.

It was on the news that France opposes Bulgaria and Romania’s joining the Schengen zone and maintains that the citizens of these countries should not be allowed to travel across Europe without visas. What do you think is the reason for their opposition, and what measures have you adopted to solve this problem?

Basically, the opposition for Bulgaria’s joining the Schengen agreement, in many cases, including in France, is stimulated by internal problems that have nothing to do with Schengen. It sounds paradoxical, but listening to some statements by the French government officials, we see this is happening as it is. They say that the Bulgarian citizens should not be allowed to Schengen. This is a total mixture of the right reasoning. Schengen is for the citizens of its countries, not for Bulgaria neither for the European Union. Bulgaria is on the external border of the union, and we have all the time different kinds of inspections, and this is one of the best reasons to keep the border for Bulgaria. So, I really don’t see any reasons for not opening the Schengen Area for Bulgaria, but again this is part of the political debate in Europe and sometimes internal domestic policies which interfere with the EU’s decisions.

You know that around 8 percent of the population of Bulgaria is consisted of Muslims. What’s your viewpoint on the emergence and growth of the phenomenon of Islamophobia in the Western societies? How is Bulgaria treating its Muslim minority? How is the interaction of Bulgarian people with their Muslim fellow citizens?

Bulgaria has traditionally a very high tolerance for the followers of various religions and this is deeply grounded in the history. Most of the Muslims in Bulgaria have been living there for centuries, and they’re absolutely part of the national identity, so having different religions is something which is very usual for the Bulgarians and there’s not any reason for tensions. We have Jewish people, we have Armenians. Bulgaria is known to have preserved its Jewish population during the World War II. It has also accepted many Armenian refugees during the German attacks on the Armenians. So, Bulgaria is a country where you have various religions for centuries and Islamophobia is not something which is welcome in Bulgaria. Of course we might have some extremists and political forces, but all we know that generally Bulgarian people are immensely tolerant toward the various religions in the country.

I know that you constantly monitor the developments in other European countries. It was in 2011 that the Norwegian mass killer Andres Breivik massacred 77 people in Oslo and Utøya for their alleged support of the Palestinian people. In his 1,500-page manifesto, he warned the European societies against the threats posed against its multicultural environment by the Muslims. What’s your viewpoint on that?

I think any form of extremism is very detrimental to the societies. And again, it runs counter to the democratic values, to the European values, to the human values and against the capability for us to live next to each other with different religions. In Bulgaria, we have this tradition. We are living next to each other and it has been so for centuries. So no form of extremism is welcome. This is something which is important not only to the Bulgarian people, but to the whole citizens of Europe.

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Bulgaria has absorbed 37% of the EU funds by the moment

Currently, Bulgaria has utilized 37% of the European funds, Deputy Prime Minister and Justice Minister Zinaida Zlatanova said. "I am extremely shocked by what happened in recent years. Bulgaria is the second place in the lowest absorption of funds from all EU Member States, only Romania is worst. The caretaker government found 27% EU funds utilization by the government of Citizens for European Development of Bulgaria. It is a lie that all those years ago Bulgaria was doing well with the EU funds. Next to the last place for me is not good. I am an ambitious person and I like my country very much so I can’t think that it's good," Zlatanova added.

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Bulgaria to sell land to foreigners from January 2014

The planned extension of the moratorium on the sale of Bulgarian land to foreigners is theoretically possible, but practically it is not realistic. This is how Prime Minister Oresharski answered questions from representatives of civil society and non-governmental organizations about the matter of selling Bulgarian land to foreigners, Standart daily reports. According to the Treaty of Accession to the EU, from 1 January 2014 foreigners will be entitled to freely buying land in Bulgaria. The Prime Minister is 99.99% convinced that the procedure to extend this moratorium is impossible. He explained that at the end of 2004, Bulgaria joined the ratification on the sale of land to foreigners and this ratification is currently supported by 28 countries. "Any change that requires a new contract ratification has to be signed also by the other countries. Even if only one party does not agree to extend this deadline, the contract extension can not be realized " Oresharski commented.

According to him, if Bulgaria has requested such a change, it would not be properly understood by our partners. Earlier it was announced that the Bulgarian state will explore all options to extend the moratorium on the sale of land to foreigners, which expires at the end of 2013. If necessary, it will seek to amend the Treaty of Accession to the EU, a recent agreement between grain producers and the government said. ''The extension of the moratorium is important for us because the agricultural business in the country is not strong enough and a potential massive takeover of lands by foreigners may be even a threat to national security'' farmers commented. Agriculture Minister Prof. Dimitar Grekov stated that he will ask the European Commission for a +7 years extension on the moratorium on the purchase of land by foreigners on September 19.

Now it is also possible for foreigners to acquire land in Bulgaria, however, only through a registered Bulgarian company and on behalf of a legal person. There are conflicting views about the acquisition of Bulgarian land by individuals from other countries. On the one hand, it would activate the investments in small villages and revive poor regions. On the other hand, however, the moratorium is a kind of protection of national interests. Foreign entrepreneurs from countries such as Qatar and Bahrain already expressed their interest in buying Bulgarian land for animal husbandry, the minister informed. According to the minister, after the +7 year moratorium, owners could sell their fields on a much higher price. He also noted however, that he does not know about any other similar request from another EU member country.

 


         
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