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Thursday, May 20, 2010

Bulgaria and the EU, 05, 2010

A little post dedicated to my own country, because I noticed its name to appear in recent news in not very benevolent light. You can see those articles below.
Now, I am a realist, I know my country has a lot of problems, especially financial.  But it's not just us, the whole world has tough time. And in the light of Greek problems, ours are just piece of cake. And that's why, I was very surprised to read such negative articles. And the worst is that they are actually written by Bulgarian journalists. Sure, in Bulgaria we have well established tradition to be the most critical to our own, but anyway. My duty is to shed some light or at least to share my own opinion on the issues and you will then decide for yourselves.

So, on the first article - i don't think the EC has the right to give or deny permissions for an energy project in any country. Because this is sovereign issue. That is, as long as we're not asking for funds for this project which we are not. So I don't understand how a Commissioner will go to a country and say what he said in Bulgaria. I don't know how Barroso chose his  Commission but I find some of the guys very very bad ideas. Or maybe they are fine, but they are chosen to be puppets of Barroso? If that's the case, I'm very disappointed. Because it's much better to appoint disobedient people with qualities than stupid puppets that will never take any initiative or put their hearts in a project. In the case of Bulgaria and our new nuclear plant, that's been built for the last 10 years, we would never choose a technology that's not safe. I think I read somewhere that our plant was the first possibility of that Russian technology to be used in European country. I'm sure they'll do their best to impress Europe with good things, not with bad. Because that is where their profit is.

And note - the EC tells us that they don't want that plant to have Russian investor? Why? How the kind of investors you have relates to the safety of the plant? It's the technology that is important. Too bad our current government is so inexperienced, it's hard for them to know when to give up and when to resist. I'm a great supporter of that power plant, because I think we need it. And because I'm a supporter of nuclear energy, of course. I hope that at some point, Belene will be built. But that's not the important part here - the main question is about the level of interference the EC is allowed. After all, we know France would prefer French technology at the plant. But if it wasn't the best option for us, should we just sit and watch how they stop us from building something on our own soil? I don't think so.

The second news is about the eurozone entry of Bulgaria. This is more or less ok with me, even though the way the article was written again implied some kind of corruption involved. When the reality is much simpler - each country tries to make their deficit look better. In time of crisis, that is even more important. We used to have around 2%, now it will be around 4-5%. This is a lot, but let's remember that Greek is collapsing, Romania needed a credit from IMF, we're so far good. Our economy isn't in that bad state and if they make a reduction in the administration (which I support) and if they review  projects for unhealthy ones, we'll be good. Thus, our economy is not that bad. The time however is bad for entry in the eurozone, especially with the problems of the euro. So, we decided it's not worth the trouble. That's all.

The third article is about an issue that is more problematic for me. It's about our license to buy and sell carbon emissions. Why this is important? Because our government counted on them to find 500m euro for the budget. And once they said it, we were suddenly out of the trading. Weird, right? And this, after the EC tried for months to think of a way to stop member-states with excesses of emissions allowances to sell them for profit. Isn't this suspicious? And veeery convenient. By the time we are allowed to sell, the crisis is likely to be over. Now, I'm sure our government will find a way to survive. However, such actions were very nasty from the EC. After all, it's theirs rules, their mechanism, we're just benefiting it just like other member-states did. However for them, it's ok, for us - not? I don't think this is very fair, right? And I think the EU member-states should ask themselves whether this is the type of union they want to participate. Because if today they do this to us, tomorrow, they will do it to someone else. Whoever "they" are. So we have to be careful about such actions and prevent them, if we want our union to be good for everyone. And that's the only way it may stand the test of time, after all.

I think the moral is simple. I don't deny my county has many problems, especially with corruption and with the mafia that is so interwoven in government and with the total lack of regulations or control how different agencies and authorities should function and with the total apathy of people that are so sicked and tired of the whole mess we're living in. However, those articles were not objective. And I had to refute that. Now you're informed. Enjoy :)

Today:
  1. Oettinger tells Sofia to be ‘wiser’ with energy projects
  2. Bulgaria drops plans for early eurozone entry
  3. Bulgaria suspended from CO2 emissions trading

Oettinger tells Sofia to be ‘wiser’ with energy projects

06 April 2010
EU Energy Commissioner Günther Oettinger paid his first visit to Bulgaria on 3 March, the country's national day. Although the visit received limited coverage, it gave the commissioner an opportunity to criticise Sofia's sometimes questionable energy choices.
In Sofia, Oettinger made clear that Brussels is not happy with Bulgaria's energy policy.
''Each project in the energy sector should be agreed with the European Commission,'' he said, stressing that ''we are very sensitive about the Belene nuclear power plant project''.
Such messages are seen by many as long overdue. For the past 20 years, governments in Bulgaria have thrown their weight behind two energy projects of questionable economic and financial sustainability: the planned Belene nuclear power plant and the 'Tsankov Kamak' hydroelectric plant, which is almost complete.
Both have disappointed in various ways, and it was recently disclosed that billions of euros had been poured into what now appear to be corruption schemes.
 Following the withdrawal of Germany's RWE as a strategic partner for the project, Russia offered Bulgaria a €2 billion loan to finance the construction of the plant. The Bulgarian government initially accepted the offer, but after interference from Brussels it became clear that the project would only go ahead with a European investor (EurActiv 03/03/10).

The Tsankov Kamak hydropower plant is Bulgaria's second most controversial project in the energy sector.
According to recent revelations, the plant might become the most expensive hydropower project in the world. Costs were originally estimated to be €220 million but have since doubled, mainly as a result of the construction of a 22-kilometre road between the towns of Devin and Mihalkovo, which is said to have cost 222 million Bulgarian levs (€114.5 million).
Prime Minister Borissov said there would be an investigation into what has been dubbed Bulgaria's "most expensive road," the construction of which he said had shown clear signs of corruption.

Less controversial are a series of gas pipeline inter-connector projects. On 5 March, Bulgaria and Serbia signed a protocol in Brussels for the construction of a gas pipeline connection between the two countries, running from the Bulgarian city of Dupnitsa to the Serbian cities of Dimitrovgrad and Nis. The pipe should be completed by 2013, with €60 million coming from the European Regional Development Fund.
A memorandum to construct a gas pipeline between the Bulgarian city of Stara Zagora and the Greek city of Komotini was signed on 14 July 2009 between BEH (Bulgarian Energy Holding) and IGI Poseidon (50% owned by Depa and 50% by Edison). The project is due to benefit from EU funding. It should be completed by 2013 and its cost is estimated at €120 million. 
A projected gas pipeline connection between the Bulgarian city of Rousse, on the Danube, and its Romanian counterpart Giurgiu was drawn up by Bulgartransgas and Romanian company SNTGN Transgaz. This pipe is also included in the list of projects sponsored under the EU economic stimulus plan. Worth €27.6 million, the pipeline should also be completed by 2013.
Nabucco and South Stream
Last but not least, Bulgaria is a key transit country for both the Nabucco and South Stream pipeline projects.
Nabucco was given top priority by the EU as it is designed to brings gas from countries other than Russia. The pipeline would cost between €8 and €9 billion and should be completed by 2013.
The South Stream gas pipeline is a project sponsored by Russian gas giant Gazprom. It is designed to bypass Ukraine, running under the Black Sea to Bulgaria, with one branch going to Greece and Italy, and another one to Romania, Serbia, Hungary, Slovenia and Austria. The project should be completed by 2015. Its value is estimated at €8-10 billion and the pipeline would have a capacity of 64 billion cubic metres. source
My comment:

Bulgaria drops plans for early eurozone entry

12 April 2010
Bulgaria's centre-right government on 9 April abandoned plans to join the bloc's exchange-rate mechanism, ERM II, after the country recorded a larger-than-expected deficit in 2009 as a result of unaccounted procurement deals signed by the previous socialist-led cabinet.

Bulgaria will not enter ERM II, seen as the eurozone waiting room, Finance Minister Simeon Djankov announced at a press conference on Friday (9 April).
Bulgaria had planned to join ERM II in 2010 and to become a member of the euro zone in 2013.For a long time, Bulgaria has claimed that it is about to fulfil the Maastricht criteria for eurozone entry (EurActiv 09/03/09).
As part of efforts to meet the target for ERM II, the centre-right government had even delayed VAT refunds for businesses in a bid to keep the budget deficit low.
However, Finance Minister Djankov explained that Bulgaria's hidden budget deficit had ruined its dreams of joining the euro zone.
The minister said the deals had increased the deficit to 3.7% of GDP compared to earlier estimations of 1.9%.
Nevertheless, the minister was quick to stress that the financial stability of the country was not at risk. The IMF has maintained a currency board for Bulgaria since 1997. sourceMy comment:

Bulgaria suspended from CO2 emissions trading

14 May 2010
Bulgaria will be suspended from carbon emissions trading under the Kyoto Protocol as a result of poor transparency and untrustworthiness, the country's environment minister said on 13 May. The decision represents a heavy blow for the government in Sofia, which expected to receive €250m in revenue from the scheme this year, according to Dnevnik, EurActiv's partner publication in Bulgaria.
Bulgaria will be suspended from the scheme as of 30 June if a United Nations' committee revokes its accreditation under the treaty. A formal decision is expected by the end of June. Environment Minister Nona Karadzhova said there was no chance of any reversal.
The suspension, which is expected to last until at least November, comes after UN checks had shown that Bulgaria's national system for recording greenhouse gas emissions, which is key for ensuring compliance under Kyoto, was not transparent and trustworthy, Karadzhova explained.
She said the ban would prevent Bulgarian companies from trading on greenhouse gas emission schemes under Kyoto, and would also affect their participation in the European Union's emissions trading scheme (EU-ETS).
Over 130 Bulgarian companies, which waited for over two years to begin trading under the ETS, will now only be able to sell their free quotas until 30 June. The government will most likely not receive a single euro of the so-called Assigned Amount Units (AAUs) that it has accumulated, Dnevnik writes.The news comes as a heavy blow for the Bulgarian government, which had earmarked €500m of such revenue for financing anti-crisis measures.


Foreign experts revealed that just one person, who works in the environment agency, deals with the country's yearly reports. The young female employee reportedly could not maintain consistency in the information included in the reports.
"It's a young woman. She had worked well, but in fact she was on maternity leave during the [foreign experts'] check and we had to call her to come to the office," Karadzhova said.
Her predecessor Dzhevdet Chakarov, now a member of parliament, responded to accusations of negligence by the previous government by saying that throughout his term, nobody had questioned the consistency of the reports.
Bulgaria's suspension from CO2 trading is the "merit" of the current government, he said.


A European Commission spokeswoman said the suspension would have only a limited effect on Bulgaria's participation in the EU emissions trading scheme.
"The suspension would not extend to trade in [EU carbon] allowances, but would temporarily prevent the delivery of allowances," the spokeswoman said in an email, quoted by Reuters.
"In the short-term, the only effect would be that allowances could not be moved into and out of the Bulgarian [emissions] registry, which would hamper spot trading in allowances for Bulgarian companies, as allowances could not be delivered until the suspension is lifted."
Spot trading in EU permits and Bulgaria's share of permits both only account for a small proportion of the total EU carbon market.
 source


EU plans measures to curb demand for natural resources -
Environment Commissioner Janez Potočnik yesterday (7 April) announced that he is preparing new measures for 2011 to reflect the true cost of natural resources in products and services and substitute virgin raw materials for waste wherever possible. -

Euro zone aid provides short-term relief for Greece - The euro zone's standby aid package for Greece offers only a short-term solution to Athens's debt crisis and leaves many questions about the future of the single currency group and the European Union unanswered.
Brussels eyes water savings in agriculture - Addressing water efficiency in farming, which accounts for two thirds of EU water use, should be one of the priorities in reforming the Common Agricultural Policy (CAP), the head of the European Commission's water unit suggests.


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