Bulgaria's no-confidence vote offers opportunity for some EP electioneering

By bne IntelliNews May 23, 2014

Sandy Gill in Sofia -


It's quite a bold step — and perhaps a somewhat risky one. With Bulgaria's polls for the European Parliament due May 25, the country's own parliamentarians have been called out of a two-week recess that should have been devoted to mutual pre-electoral disembowellings, and are to assemble Friday, May 23. The sole agenda item: a debate on a motion of no confidence in the government put forward by GERB, the party of the macho former centre-right prime minister Boiko Borisov. And the precise subject of that lack of confidence: energy policy.

That, remember, was exactly the policy area that brought Borisov down 15 months ago, when citizens irate at alarmingly high electricity bills took to the streets in their thousands all over Bulgaria. The targets of the protests broadened to include "monopolists", "the mafia", "oligarchs" and the government itself. And the day before Borisov's resignation saw an emotional and semi-coherent press conference at which — somewhat ignoring due process and the supposed independence of the sector regulator — the mouthy premier swore to take away "this very day" the licences of one of the country's foreign-owned electricity distribution companies.

And now it's a suitably restored and self-confident Borisov playing the "energy card". Not that the left-led government of Plamen Oresharski is notably defensive about the subject. Quite the reverse: it boasts of achievement and acts aggressively.

Left foot forward

Take household energy prices. In early March 2013 the departing Borisov cabinet — sorry, the "independent" State Energy and Water Regulatory Commission (SEWRC), recently restaffed and thoroughly bludgeoned — found ways to cut household tariffs by around 7%. Not to be outdone, the Oresharski cabinet, which came to office in June 2013, promptly introduced a "new pricing model" that allowed SEWRC to reduce power prices by a further 4.5% at end-July. And at end-December a further 2-3% was "found" under the leadership of Boyan Boev. He, incidentally, was the fifth regulatory chief within a year, and appointed just three weeks earlier having served three months as government-nominated head of the Bulgarian Energy Holding (BEH), the behemoth mother hen that has all state-owned energy firms as its chicks.

Or take electricity exports. Oresharski's energy minister, Dragomir Stoynev, regularly boasts of having restored these, and with some reason, because they had been rendered mostly uncompetitive by "grid charges" levied to finance incentive payments for the renewables capacity that boomed alarmingly on Borisov's watch. With power exports exempted from these by the new regime, they became competitive again — working wonders for capacity utilisation at Bulgaria's lignite mines.

And discos — that is, the three regional pairs of electricity distribution grid and supply companies — well, they aren't much liked, if only because they're the ones that send you nasty bills, cut you off if you don't pay them, and sometimes let you down with supply outages. Being foreign-owned (since privatisation in late 2004) doesn't help either: the Czech firms CEZ and Energo-Pro control, respectively, the country's West (including the capital Sofia) and its North-East, while Austria's EVN runs the South-East.

Reviled by February 2013's protestors, the discos are favourite political targets. The extreme and increasingly anti-EU nationalists of Ataka — important in the tricky political arithmetic of the present parliament — loathe them as "colonial" manifestations. Bulgaria Without Censorship, a new and, if polls are to be believed, impressively rising political force, is also hostile to the "monopolists," though being Europhile it favours a thorough investigation of their activities by Brussels. And the government — and agencies probably responsive to the government — has been "playing the disco card" recently.

In mid-March, Stoynev cited money allegedly owed to financially troubled state-owned national power company NEK by the regional power suppliers — who disputed the claim — as grounds for yanking their licences, with procedures to do so duly set in motion by the oh-so-independent Boyan Boev within days.

The dispute remains unresolved and twice deferred — probably because the authorities recognise that it's an impossible can of worms — but Boev launched a "second front" in mid-May, presenting at a high-profile press conference reports that reflected a four-month investigation of distribution grid company activities between 2008 and 2012. These accused the discos of almost 2,700 infringements in matters like meter-installation, meter-reading and deviation of voltage levels — worth BGN54m (€28m) in fines, assuming these are levied at the minimum rate of BGN20,000 a pop. On the strength of these reports, Boev also attacked the discos for having been being BGN818m better off than they "should" have been according to regulatory standards over this period, thanks to factors like higher-than-planned revenues and bigger-than-planned technical loss reductions. How much sense this makes remains to be seen — the relevant reports are certainly bulky — but cynics might well conclude from timing that it's nice pre-electoral stuff.

And finally, there's a special parliamentary committee that was set up in early May — on the initiative of Ataka, but with the support of the ruling Bulgarian Socialist Party (BSP) and its coalition partner the mainly ethnic Turkish Movement for Rights and Freedoms (MRF) — to investigate the doings of the discos. Chaired by the fierce Ataka MP Magdalena Tasheva (who distinguished herself last year by hinting at cannibalism among Syrian refugees), this will operate for a promising three months. It's homing in on an unscheduled meeting that Rosen Plevneliev — arguably Bulgaria's least popular post-communist president — had with EVN's chief when the licence threat arose in March. Treasonable activity by "EVNeliev", fumes Ataka, whose opinion poll ratings are dangerously low and look like falling below the 5.88% threshold needed to qualify for an MEP. Tasheva won't miss a trick.

Born-again Boiko

So it's quite a bold move by Borisov to make energy the grounds for a motion of no confidence in the government just two days before Bulgarians go to the European polls. But it might just work. "Working" wouldn't — or wouldn't necessarily — mean the success of the no-confidence vote. Most likely parliament will achieve the quorum necessary for a sitting — not doing so would expose the government to charges of evasiveness — but actual voting probably won't happen today. And parliamentary arithmetic makes a successful vote rather unlikely even thereafter, barring very interesting developments indeed in the wake of the EU elections. GERB currently has 94 MPs, with a vote of 121 in the 240-seat parliament needed to pass a no-confidence vote, and neither BSP nor MRF (119 between them) nor Ataka (23) seems likely to oblige.

No, "working" would mean that arguments aired in parliament Friday have some impact on the following Sunday's European Parliament voting. Which is possible. Borisov has, predictably, been forthright on the subject of Stoynev's "incompetence" — which may or may not stick, for a minister who is relatively young and not an energy man by background. He's also deplored what the motion describes as "severe interference" in the work of SEWRC, a charge that Boiko "This-Very-Day" Borisov delivers without any visible sense of irony.

But GERB is also managing to hit failings that are quite near the knuckle for the BSP. Borisov taunts the Socialists with doing nothing about their beloved Belene nuclear power project — for the sake of which, in January 2013, they put Bulgaria through an apparently pointless referendum. He also has it both ways on the proposed Russian-led South Stream gas pipeline, professing support for the project provided it's in conformity with EU laws — a swipe at the BSP's legislative efforts to circumvent the latter — and saying, plausibly or not, that he would have got construction started before Euro-problems arose. Both points might ring bells with the disgruntled BSP supporters currently being wooed by the dissidents of former leftist president Georgi Parvanov's formation ABV, which some polls show to be on the cusp of European Parliament election success.

And, crucially, there's insistence on a reality check about power prices and the financial health of the electricity system. The former have been "artificially decreased". And as to the latter, well, GERB has been asking for some weeks for financial reports on NEK, which — since NEK is a state-owned company — were due for submission in late April. They've not appeared yet and, earlier in the week, the energy ministry would say no more than that they will be available by end-July. Ominous, say Borisov and friends, talking both of an impending financial crisis in the system and of covert BSP plans to hike electricity tariffs sharply when the time comes mid-year revisions — by which time, of course, EU elections will be conveniently out of the way.

Now, it remains to be seen whether these arguments work. Moreover, it can — and will — also be argued that many of the problems were created on Borisov's watch. But, as we shall see, the system's problems are many and genuine. And, politically as well as economically, they won't go away on the strength of one failed no-confidence vote.

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