Is the EU honeymoon over for Bulgaria?

By bne IntelliNews April 30, 2008

Nadia Damon in Sofia -

The EU's increasing weariness with Bulgaria's continued failure to tackle the corruption that permeates the government, judicial system and law enforcement looks set to reach a head in July when its annual report on Bulgaria's progress in reducing corruption is due. With an April 24 poll showing Bulgarians are almost unanimous in wanting radical changes to the country's politics, pressure is growing on Brussels to make an example of the Southeast European country and failure to get to grips with it.

So far this year, the EU has already suspended funds allocated under the pre-accession aid programmes, clumsily called SAPARD, PHARE and ISPA. These include agricultural payments and assistance relating to infrastructure development. The former head of Bulgaria's SAPARD payments agency, Assen Droumev, is currently being investigated for his role in disbursing €24.6m of EU funds issued as part of 15 projects. These benchmarks and monitoring of EU funds are part of the Commission's attempts to stop the increasingly apparent trend whereby countries step up the reform process to join the EU, then backslide on reforms once they are accepted into the club.

During a visit to Bulgaria in March, European Commission President Jose Manuel Barroso openly voiced his concern about the corruption issue. "We cannot constantly repeat that more needs to be done," he said. "Endless investigations and delayed court cases do not amount to justice."

Along with bureaucratic irregularities, the EU has been dismayed by gangland violence. To date, there have been around 150 mafia-style murders in Bulgaria - resulting in no prosecutions. The latest killings involved two Bulgarian figures - Georgi Stoev, a best-selling author who wrote nine books on the Bulgarian mafia, and Borislav Georgiev, the executive director of nuclear repairs firm Atomenergoremont, which maintains the nuclear power station's reactors in the town of Kozloduy - and both took place in Sofia in March within hours of each other. "Urgent action is required in the area of fighting organised crime in Bulgaria," European Commission spokesman Mark Gray told reporters following the killings. "Unfortunately, these shootings have continued on regular basis over the past couple of years and without successful prosecution."

Going in-house

While the occasional 'hit' on the streets may generate fresh ripples of concern, it's the recent allegations of corruption within government that are said to have prompted intense pressure from the EU for the resignation of Interior Minister Roumen Petkov.

Petkov had been at the centre of a corruption scandal following the arrest of two senior policemen, General Iliya Iliev, Bulgaria's former interior ministry chief secretary, and Ivan Ivanov, the former deputy director of the special Bulgarian committee tackling organised crime. Iliev is accused of overstepping his powers in sanctioning the use of wiretapping devices in an investigation against Ivanov, who was arrested earlier in March for leaking confidential information about ongoing investigations.

Ironically, these high-profile arrests were the result of work by the National Security Agency, an independent anti-corruption body set up by current Prime Minister Sergey Stanchev two years ago. The revelations were followed by a controversial admission from Petkov himself that he had had meetings with crime bosses.

In April, the coalition government managed to defeat a no-confidence vote (its fifth since taking power), which had been brought on the basis of its alleged "dabbling" with corruption. But while the government weathered the storm in parliament, Stanchev understood the need to make further gestures.

Petkov's ensuing resignation a few days later on April 13 was predictably unrepentant, with the minister claiming his departure was "not a sign of weakness... but a sign of a desire for deep reform of Bulgarian law enforcement agencies." But while the international press was feasting on his exit, Petkov was quietly assigned by his Bulgarian Socialist Party to a coalition workgroup. Its remit? To deliberate over what changes should take place in the cabinet as a result of the ongoing scandal...

Petkov's continuing presence highlights the plight of the 41-year-old Bulgarian prime minister whose party comprises powerful socialists such as Petkov and Roumen Ovcharov. (The latter is the former economy minister, who resigned in May 2007 following allegations of soliciting bribes and influencing investigations.) Stanishev may appear to be constrained by Soviet-era politicians, but the man known to his party as 'the kid' has vowed to make tackle the issues.

Following Petkov's removal, further cabinet changes were announced. These include the appointment of Bulgaria's Ambassador to Germany Meglena Plugchieva as deputy PM without portfolio to oversee the absorption of EU funds, the appointment of the BSP parliamentary leader Mihail Mikov as minister of interior, Nikolay Tsonev as defensce minister, Evgeniy Zhelev as health minister, and Valeri Tsvetanov as agriculture minister. Petkov, meanwhile, is widely expected to return to slot back into government in Mikov's now vacant position, and there is even talk of him leading his party's re-election campaign in next year's parliamentary elections.

Too little, too late?

With the next EU report due in just a few weeks, the question is: 'Has Bulgaria done enough to satisfy the Commission?'

While an interim report from the EU in February acknowledged that the country had made some progress in the one of its three benchmarks, judicial reform, Commission spokesman Mark Gray says Bulgaria is a long way from doing so in fighting corruption and organised crime.

"We're not going to pre-empt what we're going to do now," he told bne. "We have made it clear where the shortcomings are. Although we tend to avoid comment on resignations and appointments, what we have said is that we hope the changes lead to a momentum for the reform process - because the next three months are a crucial period where we need to see tangible progress on the ground."

Gray emphasises that the ongoing investigation into the mismanagement of funds relates to existing programmes, ie. pre-accession schemes between 2000 and 2006. Any sanctions the EU might decide to impose on Bulgaria in July will relate to the 2007-13 period. While the figure, which has already been set at €6.85bn, won't change, the EU has the right to approve projects and impose controls.

Pressure is also growing at home on the politicians. According to the findings of a poll by Alpha research, published on April 24, Bulgarians are almost unanimous in demanding radical changes in the country's politics. Some 92% say reform of the interior ministry is needed, while 82% believe the judiciary also needs to change.

Sadly, the public appears just as sceptical as the Commission that anything will change. Of the 92% who said reform of the interior ministry is urgently needed, some 59% said they don't expect that to happen during the current government's time in office.

Send comments to The Editor

Is the EU honeymoon over for Bulgaria?

Related Articles

Macedonia kept on hold as Balkans edges towards EU goal

Clare Nuttall in Bucharest -   Macedonia’s EU accession progress remains stalled amid the country’s worst political crisis in 14 years, while most countries in the Southeast Europe region have ... more

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

bne IntelliNews - Erste Group Bank saw the continuing economic recovery across Central and Eastern Europe push its January-September financial results back into net profit of €764.2mn, the ... more

CEE leaders call for Nato troops to help deter Russian aggression

bne IntelliNews -   Central and Eastern European leaders blasted Russian "aggression" on November 4 and called for Nato to boost its presence in the region. The joint statement, issued at an ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.