Borisov and Putin:The Pragmatic, Puppy-Loving Great Leaders of The East

Novinite Insider » EDITORIAL | Author: Ivan Dikov |November 14, 2010, Sunday // 04:25
Bulgaria: Borisov and Putin:The Pragmatic, Puppy-Loving Great Leaders of The East

Much will be written about Russian Prime Minister Vladimir Putin's visit to Bulgaria on November 13, 2010, and about whether Putin or his Bulgarian counterpart Boyko Borisov got more out of it.

But the fact of the matter is that the meeting – which was the direct outcome of the constant Bulgarian-Russian talks of the past year – went better than expected for both sides.

Before anything else should be said, however, it should be noted that Borisov and Putin are an intriguing picture sitting or standing together. Because they are about as similar and different as Bulgaria and Russia.

Both Borisov and Putin are black-belt martial arts experts (Borisov in karate, Putin in judo). Both have a background in the security forces – even though Putin's background as a KGB intelligence officer appears to be of much greater sophistication, to put it this way, than Borisov's background as a fire-fighter and top-level policeman. In the eyes of the average Westerner, both seem to exhibit many of the stereotypical traits of Eastern European political and state leaders (actually, Southeastern and Eastern, not Central European leaders) in their "Eastern approaches", as one of The Economist blogs dedicated to "ex-Communist Europe" is named.

Do these similarities bring closer Borisov and Putin, or do they generate animosity between them on the personal level? Even though their first and only meeting before Nov 13, 2010, in September 2009 in Gdansk created the latter impression, their rather jovial hanging out in Sofia on Saturday bring to mind the former.

Saturday's meeting happened against the backdrop of historically extremely complex Bulgarian-Russian relations (for hundreds of years vacillating from brotherly love for one's kin to resentment against a brutish "big brother" or an "ungrateful young counsin").

It should also be viewed in the context of the change of the guard in Sofia in the summer of 2009 in which the Borisov government replaced the Socialist-led Stanishev government; in the latter's term (2005-2009) the Russians could pretty much count on having the officials in Sofia sign any energy deal put together in Sofia without even reading it all the way through.

This when Bulgaria (formally, during Putin's prior visit to Sofia in January 2008) signed up wholeheartedly to three really substantial Russian-sponsored energy projects on its territory – the South Stream gas transit pipeline, the Belene Nuclear Power Plant, and the Burgas-Alexandroupolis oil pipeline.

But going into specifics, what developments were several major issues on the agenda of the Borisov-Putin talks that got developments seeming quite favorable to both sides.

The greatest formal development was no doubt with respect to the South Stream gas transit pipeline, the much advertised Russian competitor of Nabucco, which is supposed to bring Russian natural gas directly to Southern Europe and Central Europe circumventing Ukraine.

The project, a mirror of the Russian-German North Stream pipe (though a more complex one) has been the absolute priority of the Russians. Bulgaria's bargaining chip in that project has been its territory – which is where the Russian pipe is supposed to end up emerging from the Black Sea, and to split in two to reach both Southern and Central Europe.

The South Stream project has been so important for Moscow that the Russians even agreed to consider it independently of the other two, the oil pipeline and the nuclear plant. The Borisov government, however, has sought to wrest concessions from the Russians with respect to some of the parameters of the project (such as the Russian demand to use existing natural gas network in Bulgaria) but, more importantly, with respect to the prices of Russian natural gas supplies to Bulgaria.

To outflank Bulgaria, or at least to pretend to do so, Moscow and Gazprom started fiddling with Romania and the prospects of turning it (with an extension into Serbia and Macedonia) into the Balkan hub of South Stream instead of Bulgaria. Even though this was a possibility – and one wholeheartedly welcomed by the Romanians who are usually much better at grabbing transit deal chances than the Bulgarians (for instance, a recent compressed gas deal with Azerbaijan and Georgia) – it has been clear for everybody that the Romanian South Stream option was much more complex technically and geographically for Russia, not to mention the Russian-Romanian geopolitical animosity over Moldova, among other issues.

On Saturday, Gazprom and the Bulgarian Energy Holding established South Stream AD, a joint venture to build and manage the Bulgarian section of the future gas pipeline, in which both sides have 50%, and which will have a board of five people, three Bulgarians (including a Bulgarian chair) and two Russians, but will only take decisions with unanimity.

Putin's Russia did get what it wanted from Bulgaria with respect to South Stream. What did Borisov's Bulgaria get out of this deal? Did it Borisov really raise the white flag before Putin, as the Russian press would have us believe?

First of all, the South Stream project by itself is quite beneficial for Bulgaria, which will profit by getting its Russian gas directly from Russia (not via Ukraine and Romania as it has been for decades), and by becoming an even more important regional hub for the transit of Russia natural gas, thus pocketing higher transit fees. (At present, only Russian gas destined for Turkey, Greece, Macedonia and Albania goes through Bulgaria; with South Stream in operation, Serbia, Croatia, Slovenia, Hungary, Austria, and Italy will also be added to this list).

Yet, by balking for months at South Stream, the Borisov government appears to have managed to wrest some concessions from Russia on another major issue on the bilateral agenda – the price of Russian natural gas supplies. During Russian Deputy PM Zubkov's visit in Sofia in July 2010, after which the two sides agreed on a "road map" for South Stream, there was an indication that Gazprom will reduce the prices for Bulgaria. Early Saturday morning, hours before Putin landed in Sofia, Gazprom said it offered a reduction of 5%-7%.

Even though this proposal has not been finalized into a formal agreement yet, and will translate in Bulgaria paying only about USD 60 M less for Russian gas annually, it still appears to be promising some kind of a breakthrough for Bulgaria in that respect – certainly better than granting the Russians all they wanted for South Stream without using this chance to haggle.

The other big news from Putin's visit to Sofia is that the Russians have offered a final fixed price (calculating in it all escalation, inflation, and other additional costs) for the construction of Bulgaria's second nuclear power plant at Belene by their company Atomstroyexport, Rosatom's subsidiary.

With Borisov claiming to have found a willing but still unspecified Bavarian-German investor (after another German company, RWE, backed out of the project about a year ago) and his very reasonable desire to avoid "surprises with rising prices" for billion-euro projects, he seems to have gotten what he wants with respect to Belene in principle. Putin and his delegation appear to have agreed to set a total price rather than a base price in which additional costs can be factored.

Whether Borisov got the desired price is a whole other story as Putin refused to reveal any sums on Saturday. According to blurry hints and suggestions made by Bulgaria's Economy Minister Traicho Traikov in the recent weeks, Bulgaria was asking for a total price of not more than EUR 7 B, while the Russians wanted EUR 700-800 M up to EUR 1 B more. Both Putin and Borisov, however, sounded rather optimistic about the future of the Belene project, with the Russian leader promising an agreement about equipment for the plant would be signed before Christmas.

Little mention was made publicly by Borisov and Putin on Saturday of the Burgas-Alexandroupolis oil pipeline, the other major bilateral energy project – which has been viewed by Sofia as very problematic over the past year.

Borisov has written off the project many times on environmental grounds, and shortly before the Russian PM arrived to Sofia, the Bulgarian Environment Ministry declared the oil pipeline's environmental impact assessment unsatisfactory – even though it still left the door open for the joint Bulgarian-Greek-Russian company, Trans-Balkan Pipeline - to repair it.

On the local level, in the Burgas District, the pipeline has been met with great resistance over concerns it might wreck both the local environment and the lucrative summer tourism industry, which has led Borisov, despite all pressure from Russia and Greece, to see the project as questionable at best. At the same time, there has been the feeling in Sofia that Bulgaria has been tricked by the Russians, the Greeks and the Bulgarian Socialists with respect to the economic parameters of the oil pipeline.

After Borisov took over in July 2009 and voiced his suspicions, Russia first tried to play the field and employed a flank manoeuvre with respect to Bulgaria's unwillingness to commit to Burgas-Alexandroupolis even before it toyed with replacing Bulgaria with Romania for South Stream.

Much the same way, it sought to substitute Bulgaria for Turkey, with a similar crude oil transit project – the Samsum-Ceyhan pipeline. In the recent months, however, the developments in that respect appear to have stalled over immense Turkish demands.

Looking at it objectively, not unlike the fruitlessness the Russian South Stream overtures for Romania, Russia has a lot more reasons to work with Bulgaria on this project rather than with Turkey for, despite all demonstrations of agreement and goodwill between Putin and Erdogan, Russia and Turkey are bound to remain geopolitical opponents, to use a milder word.

Russian commentators have recently suggested that Bulgaria eventually will come around for Burgas-Alexandroupolis – but that his will happen at a certain price for Russia – and perhaps Greece.

Whether one sees the 5%-7% natural gas price reduction offered to Bulgaria by Gazprom for agreed to South Stream as a hard won concession for Borisov – or the way the Russian media presented it – as a Russian "goodwill gesture" "rewarding" Sofia for deciding to let Putin have his way – a similar kind of a concession/gesture is expected to turn up for Burgas-Alexandroupolis some time in 2011.

Finally, a goal that Bulgarian Prime Minister Boyko Borisov set before Putin's visit – to get from his Russian counterpart measures for boosting the exports of Bulgarian foods, drinks, cigarettes and consumer products to Russia – did not see much public mention in Sofia on Saturday.

While Putin expressed happiness that the bilateral trade already surpassed the 2009 levels and that the number of Russian tourists in Bulgaria will rise from 300 000 to 500 000 next year, Bulgaria will need Russia to agree to reduce certain tariffs to make its products competitive on the Russian market where the consumers still harbor endearing memories for Bulgarian tomatoes and tobacco from Soviet and COMECON times. As of now, Bulgaria's trade balance with Russia is vastly negative because of the import of Russian gas and oil that can hardly be balanced by the relatively modest Bulgarian exports of wine, shampoos and toothpaste.

Saturday's Borisov-Putin meeting in Sofia seems indeed to have marked the first time since Ivan Kostov's right-wing government in 1997-2001 that Russia does not see its energy and economic demands get free passage by default from the authorities in Sofia – a situation which since 2005 has been greatly facilitated by the pro-Russian Socialists in power – ex PM Stanishev and two-term President Georgi Parvanov.

At the same time, however, while the Borisov Cabinet seems to be trying to sell at a more dear price its agreements to the Russians, it is not plagued by the largely blind anti-Russian sentiment of the Kostov years – something for which former PM Kostov himself, now an uneasy rightist ally of Borisov's ruling party GERB in Parliament, criticized the government hours before Putin landed in Sofia, warning it against "succumbing" to Russia.

However banal such a conclusion might sound – based on what's been going on in the Bulgarian-Russian and Borisov-Putin relations in the past year, they do seem to be heading towards some kind of a "pragmatic" foundation for cooperation.

Despite the triumphant headlines in the Russian press that Putin is going to Sofia to reap the fruits of the capitulation of Borisov's Bulgaria before the Russian demands, that is clearly not the case. All major Bulgarian-Russian energy projects in principle have the potential to be largely beneficial for Bulgaria – but perhaps not in the form that they were originally signed by the Socialist-led government in 2008.

How far can the Borisov Cabinet go in trying to get something more from the Russians? How genuine is it in seeking to defend Bulgaria's so called "national interests"? How capable is it of doing that even if it hypothetically has the goodwill to try? All that remains to be seen as great many question marks are hanging in the air. As of now, it remains an overstretch to even suggest that Putin has found his match in the Balkans in Borisov's face.

At the same time Bulgaria remains Russia's potentially best partner in the Balkans – for cultural and historical reasons – and because of the absence of geopolitical animosities – unlike Russian relations with other regional states like Romania and Turkey. What is more, if the pro-Russian forces make a comeback in Sofia, Russia will once again be spared the haggling efforts.

Bulgaria's relations with Russia – and Bulgarian political life – have always been debilitated by the division and conflicts of pro-Russian (rusophiles) and anti-Russian (rusophobes) factors. These conflicts nearly wrecked the young modern Bulgarian state in 1880s. In contemporary times, politicians such as Georgi Parvanov and Sergey Stanishev are representatives of the former group, while a politician such as Ivan Kostov is a representative of the latter.

The pro-Russian and anti-Russian sentiments in the Bulgarian society found their way before Putin's visit in small pro-Putin and anti-Putin public campaigns, with the pro-Putin camp printing charming Putin postcards stating "Putin Live in Sofia 13-11-2010," and the anti-Putin activists saying "NO to a Putin's Bulgaria."

The fact of the matter, however, is that Bulgarian-Russian relations have always suffered big time from this burden of ideology (or other special relations and special interests). If the Borisov government somehow manages to employ the pragmatism that it talks about in the relations with Russia, this will be a revolutionary change.

With all that said, the Borisov-Putin talks in Sofia will also be remembered for one highly endearing moment – when Borisov presented Putin with a cute Bulgarian Shepherd puppy, which the Russian leader immediately hugged and kissed. Chances are the Borisov-Putin-puppy photos will be circulated by the media around the world. The rugged, burly, black-belt great leaders of the East with decades of experience in the security forces had a thing for little, cute, furry animals. Who knew?

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Tags: Vladimir Putin, Russia, Boyko Borisov, Gazprom, South stream, gas transit pipeline, Belene Nuclear Power Plant, Belene NPP, Burgas-Alexandroupolis oil pipeline, Bulgarian shepherd dog, puppy

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