Issue No. 320 — May 14, 2003


by Peter Karaboev

by Angela Preacup

by Paulyuk Bykowski

Bulgaria :
by Peter Karaboev

        It is a very ambitious: Bulgaria’s government intends to complete all negotiations with EU in less than an year, by May 1, 2004. According to Foreign Minister Solomon Passy, Bulgaria has established a very good momentum to complete this job and achieve full-fledged membership in the EU. Passy said this on April 24 upon returning from Brussels, where he took part in the 16th session of the Joint Bulgarian-EU Parliamentary Committee. Negotiations with the EU have turned into a key priority for the government, one that could absorb much of its efforts in the next two years. President Georgi Parvanov said a week later that he supports the ambitions of the government and of the team negotiating with the EU to complete the accession talks in 2004. Bulgarian authorities, which have so far closed 23 out of 31 EU accession negotiations chapters face the toughest EU negotiations to date in such sensitive areas as the environment, justice and home affairs, and agriculture, while the government of Prime Minister Simeon Saxe-Coburg-Gotha has to deal with growing intra-party dissent and public disappointment.

         European Commission President Romano Prodi reassured Bulgaria on Thursday that its bid to join the European Union remained firmly on track notwithstanding the Balkan country's support for the U.S.-led war in Iraq. Bulgaria and Romania, which aim to join the EU in 2007, came under fire from French President Jacques Chirac earlier this year for siding with the United States and Britain on Iraq. France, Germany, and the Commission's President Prodi opposed the war.

         Greek Foreign Minister George Papandreou explained last month that the technical delay in the EU accession talks of Bulgaria is due to the Iraq war, which has taken up the diplomatic capacity of the EU member states and the EU itself, and this hindrance will be overcome. The whole burden of the accession negotiations with the candidate countries, as well as of the Iraq crisis, fell on Greece's shoulders [as it assumed the EU presidency], one of the reasons for the delay, added Papandreou. The Greek chairmanship of the EU Presidency has been a politically difficult period for the EU, but the Presidency has managed to keep a good tone, dialogue and unity, European Affairs Minister Meglena Kouneva agreed. Bulgaria's goal is ambitious, but is possible to fulfill, the Head of the European Commission (EC) Delegation to Bulgaria, Dimitris Kourkoulas, said on April 30, 2003. The seven chapters which have not been closed so far are complex ones, and some are directly related to the EU 2007–2012 financial framework, which has yet to be passed. Even if Bulgaria does not manage to finalize the negotiations by May 2004, this will not stop the country from joining the EU in 2007, Kourkoulas said. He underscored that the accession process is not confined solely to accession talks and closing of chapters. The process is supposed to prepare a country adequately so that it can meet the challenges of accession: in the filed of administrative, economic, and judicial reforms, Kourkoulas also said. Earlier this year, EU Enlargement Commissioner Guenter Verheugen, who is expected to visit Sofia soon, said that Bulgaria won't be able to close the membership talks by 2004.

         Italy, which assumes the EU chairmanship on July 1, will assist Bulgaria to close the finance-related chapters before the EU financial budget for 2007-2012 is finalized said Italian EU policy minister Rocco Butiglone. Irish EU Affairs Minister, Dick Roche, said on April 30 during an official visit to Bulgaria that Ireland is hoping that Bulgaria will manage to end the negotiations during the Irish presidency of the EU in the first half of 2004. Bulgaria is right to demand that the negotiations with the EU should be finalized soon, since the establishment of a new European Commission in the second half of 2004, could slow down any ongoing negotiations and create a gap in the accession process, Roche said, since the new commission will need time to start working actively and to establish a policy.

         Meanwhile, Foreign Minister Passy said that high-ranking EU officials must get used to the innovative method Bulgaria is proposing — namely, completing the negotiations on the financial chapters prior to the EU preparing its new budget framework. In Brussels, Passy and European Affairs Minister Meglena Kouneva insisted that talks with the EU on the finance-related chapters of the accession book be completed in 2004 and that they are not be closed on the basis of some financial arrangement but rather on the basis of concrete principles. Passy noted that financial terms for accession cannot be specified because the EU will adopt the next financial framework in 2006, that is after the expected completion of talks with Bulgaria.

         The three chapters which are immediately related to the EU financial framework are Agriculture, Financial and Budgetary Provisions, and Regional Policy and Coordination of Structural Instruments. The EU financial framework is expected to be passed in 2005 at the earliest as a result of contradictions between the member states on spending on agriculture and the individual contributions of the states to the EU budget. Bulgaria hopes to end accession negotiations with the EU by May 1, 2004, in order to avoid negotiating with the 10 new EU member states that are scheduled to join  the EU on that date. It is still too early to say whether Bulgaria will close the financial chapters; after the country joins the EU it will receive much bigger financial aid than others and that is why both parties are proceeding with the talks carefully in order to ensure that a mutually satisfactory result is achieved, said Kourkoulas.     President Georgi Parvanov said 2003 is decisive for the pace, progress, and results of Bulgaria's European integration process. “We have good news from Brussels and Washington about Bulgaria's European and Euro-Atlantic integration, they presuppose a lot of hard work,” Parvanov told the meeting of the Council on European and Euro-Atlantic Integration. The Council is the coordination unit attended by ministers, MPs, scholars, NGO representatives, businessmen, journalists, diplomats, and experts and its immediate task is to analyze the commitments Bulgaria has made in its accession talks with the EU.

         On May 7, 2003, President Parvanov criticized the country's Parliament for the slow tempo of legislative reforms designed to harmonize the country's laws with that of the European Union. “I am concerned by the lack of transparency in the sphere of EU accession negotiations,” the president said. Bulgarian authorities cannot go to the negotiations with a disposition to accept everything we are being offered, Parvanov said a day before his one-day official visit to Brussels where he met the European Commission President Romano Prodi, NATO Secretary General George Robertson, the European Parliament President Pat Cox, and the European Convention Vice President Giuliano Amato. “It is surprising how Parliament can hold debates on one or two media-related bills each year and at the same time the National Assembly is unwilling to speed up the passage of bills related to harmonization of Bulgarian legislation with EU laws and shelve social and anti-corruption bills,” Parvanov noted.

         And he's right to complain. Some 94 percent of Bulgarian small and medium-sized enterprises (SMEs) are not aware of agreements reached by the government in the negotiations with the EU and do not know what obligations they will have to assume in the future, a survey of the Bulgarian Industrial Chamber showed. (SMEs are defined as companies with 500 or fewer employees.) One-fifth of those polled believe Bulgaria will attract more foreign investment after joining the union. Just 6 percent expect that consumer safety standards will rise and about 10 percent fear an increase in competition. More than 20 percent of the surveyed companies expect to receive aid from the EU structural funds after accession, but more than half of all SMEs are not aware of the existing opportunities for using pre-accession aid. The EU ISPA Programme is known by only 25 percent of the companies. About 50 percent of the SMEs do not know about Phare or SAPARD. Only 12 percent of the surveyed companies are aware of the content of the 2000 European Charter for Small Enterprises and less than 20 percent know the details of the national strategy on small and medium-sized enterprises.

         About 500 Bulgarian SMEs have received the ISO 9000 quality certificate so far, a survey of the Bulgarian Industrial Association (BIA) carried out in April 2003 showed. No Bulgarian company has the ISO 18000 certificate for occupational safety and health. Only 1.2 percent of Bulgarian SMEs have received the ISO 1400 environment certificate. About half of Bulgarian SMEs begun introducing the international quality standards necessary for their operations, the survey showed.
         At the macroeconomy level, things still look good. The Bulgarian economy defied a global slowdown last year and grew by 4.8 percent, well above a government target of 4.2 percent and higher than a 4.1-percent rise in 2001, according to government statistics office (NSI) data. The GDP stood at a preliminary $15.563 billion last year, NSI said. The 2002 growth was based mainly on a 6.2-percent rise in exports, despite weak conditions in the EU,  Bulgaria's main trading partner. But macroeconomic success has yet to translate into higher living standards and Bulgaria remains among the poorest nations in Europe with low levels of income and domestic consumption. The average monthly income per capita in Bulgaria is projected to increase from the current 91 euro ($98) to 200 euro ($215) in 2007 and to 280 euro ($302.1) in 2015, the resident representative of the United Nations Development Programme (UNDP) in Bulgaria, Marta Ruedas, said. The average monthly income in the EU member states stands at 1,080 euro ($1,160). Fifteen percent of Bulgarians rank as poor.

         Bulgaria's credibility among foreign investors has fallen after its pro-Western government failed to complete two long-delayed landmark privatization deals during the last two months — the Bulgarian Telecom Company (BTC) and the tobacco monopoly, Bulgartabak. These failures have dashed hopes that the government that won elections in June 2001 can deliver on pledges to put the ex-communist Balkan country back on the global investment map and ride it into the European Union in 2007, Reuters reported. Some economists said the two failures had also raised a question mark over the government's ability to handle structural reforms, vital to win further credit rating upgrades and meet key requirements under loan deals with foreign donors. Local commentators said the government's decisions to scrap both deals were politically motivated and aimed at pleasing its junior coalition partner, the ethnic Turkish MRF party, on which it depends for its fragile parliamentary majority. Most of Bulgaria's ethnic Turks, who account for 10 percent of its eight million population, grow tobacco and the MRF strongly supported the second-in-line bidder for BTC — a Turkish consortium led by Koc Holding.

         But maybe the core problem is the current concern over the delay in judicial reform. With Sofia setting itself the task to complete its accession negotiations by the end of next year, the Constitutional Court ruled earlier this year that under the current Constitution no one can investigate the Prosecutor General, whose office has an extremely bad public reputation. Constitutional  changes can be made solely by the Grand National Assembly. The current Parliament is in the middle of its term and no one wants to talk about early elections in order to gain a constitutional majority.

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Romania :
by Angela Preacup

         “Europe is far from us, but we are close to it.” This wisdom is what Romanian politicians have been trying to explain to the people for thirteen years now and which the people strangely don't seem to understand. Maybe during all this time they have heard the same line over and over again and there is still no less distance existing between them and this big, old developed Europe.

         For more than a decade now, Europeans from different countries have come to Romania not for tourism but out of curiosity to see the country that “produced” the first revolution broadcast live on TV. All of them discovered a beautiful country by geographical standards but a ruined country in many other senses: disastrous infrastructure, illegally sold orphans, omnipresent poverty, amateur politicians, and an archaic style of life, especially in the rural parts of the country. Europeans  left the country with the sad conclusion that Romania is living 25 years behind Europe. This became one of Romanians’ biggest obsessions and one of the most important things that fed their growing national complex of inferiority. In their characteristic manner, they found a way of making fun of the whole situation, and of themselves with a sardonic joke: “Romania is such a beautiful country,” they say, “too bad it is inhabited..”

         Today, a foreign visitor finds a Romania sensibly changed, but not enough to impress. The infrastructure has began to improve, child trafficking has been stopped by the state, politicians are more experienced even if still corrupt, official statistics report a small economic growth, although not on the scale that is felt directly in Romanian pockets. The most interesting aspect of all these changes is that they are not a result of a national campaign or mobilization of the country, but are more due to clear pressures from outside or, to be more specific, from the European Union, which has forced this development by imposing its strict standards on a country where everything is variable and negotiable.

         This being the general situation and perception, what has caused the failure thus far of Romania’s accession to the EU?

         Beyond jokes, the reason begins with the fact that Romania really is 25 years behind Europe, like all the other countries with a communist heritage. And updating to the present is not an easy or rapid thing to do, even when the new patterns to be implemented are well experienced in other developed countries. Romanians knew that all along. So, what Romania had to do was to make a quick change from a state-controlled economy to a liberalized one, this being the major reform that could bring along all the other changes required by the EU standards. From the very beginning, European institutions made very clear that the essential turn in the process would be a well-executed and quick privatization. However, general corruption at all levels made such a change impossible for Romania. Due to personal and group interests, and the interference of politics in the economy, even today the state has a huge implication and control over the country's economy. About half of Romania’s large industrial units still belong to the state, and most of these are not economically competitive, their existence prolonged only by the state budget.

         The Party of Social Democracy of Romania (PDSR) government of Adrian Nastase, put in power three years ago, recently appeared to come to the realization that there is no more time for delaying or mimicking the big, real reforms, and that Romania has to make a sudden turn at the twelfth hour, or lose the course of European integration for good. Announced over and over again — and expected by everyone inside and outside the country —  the essential privatization has yet to take place because it would cost too many votes in the next elections due to the unavoidable large layoffs involved in any such move. Analysts noted that the government tried to reach economic growth by artificial means instead. It succeeded, but the increase in GDP of 2002 was so small that no one could feel it. Still, for the first time in the last three decades, Romania seems capable to finalize the “stand-by” agreement with the International Monetary Fund.

         Thus, the most optimistic date for Romania's admission into the EU seems to be 2007, if the country is able to resolve economic issues by then, which is essential for all the other major reforms, like health and education.

         Influential voices inside the European community, however, do not concur in what this year could bring for Romania. In addition to which, there is another consideration: the Jacques Chirac episode. Besides any economic discussion, this political incident related to the position of some Eastern European countries towards Iraq could make a difference, even if today no one can exactly say what its real implications are. Romania was one of the first countries to announce its support for the American policy, concentrating on its interests towards NATO and ignoring the possible damage it might do to its European interests. France, considered a traditional ally of Romania, felt betrayed, and the French president couldn't help expressing that in an awkward and rather undiplomatic outburst in which he declared that Romania’s (as well as Bulgaria’s) support of the United States had seriously diminished its chances to enter the EU soon. This might not be true, since even between the traditional EU nations there are conflicting opinions on many important international issues.

         Public opinion in Romania reacted strongly to the French declaration, believing that, while things were not in good standing in relations with the EU before the war, now Romania had blown away any chance of being accepted into the organization. But Romanians, as well as French, are temperamental, Latin people. And the war is over. As for the Romanians, they became more temperate after they saw their country invited to join NATO, a decision that proved that the Romanian approach to the war was a good policy.

         In fact, ordinary Romanians do not really know what the EU, or NATO for that matter, is all about. For thirteen years, they've heard everyone going on and on about the importance of their country entering the EU. But most of them do not know what this organization is, what it means, and what changes Romanian entrance would bring. People are too busy with their everyday poverty to concentrate on such things. Still, especially from this perspective, they know that the EU means most importantly a better life. And because of that, a great majority would answer “yes” in a possible referendum regarding the necessity of Romania entering the European Union.

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by Paulyuk Bykowski

         Belarus may leave the Organization for Regional Integration, that country's president, Alexander Lukashenko, announced on April 27 at a summit in Dushanbe of the Eurasian Economic Community (EURASEC).  EURASEC was conceived by the presidents of Belarus, Kazakhstan, Russia, and Ukraine meeting three months ago at Putin's residence during Homeland Defenders' Day celebrations. These countries agreed to work on a September deadline for an “agreement on the formation of a Single Economic Space, a concerted economic policy in a number of areas, harmonization of legislation and the establishment of a single, independent interstate regulatory Commission on Trade and Tariffs.”  This, it is proposed, will be the foundation of the Organization for Regional Integration and will, according to many experts, ease those countries' entrance into the World Trade Organization.

         The Belarusian presidential press service reported that Lukashenko criticized Russia for insisting on a gradual solution to the problem of “protecting the internal markets of the member-states of the EURASEC while not imposing special protective, antidumping or compensatory measures on mutual trade.”  This would indicate that the Belarusian leader noted the importance of furthering agreements on import customs policy, harmonization of tax law, formation of a common pool of energy resources, and more effective exploitation of national transportation complexes. And he thinks that the EURASEC is not taking concrete steps toward meeting its earlier commitments.

         Lukashenka emphasized that this goes for the Organization for Regional Integration as well.  “A group of experts of the highest level will meet in Minsk in May, for the fourth time, and there is no movement forward.   If this continues, we will not participate in this organization, because it is just a waste of time,” he announced.  He added that there is no need to adopt a new model.  They can use the one worked out for the union of Belarus and Russia.

         There is a paradox in Lukashenka's suggestion that his colleagues at the EURASEC imitate the experience of building a Union State to solve that problem.  At issue are relations between Belarus and Russia, and those relations are not stable concerning internal markets.

         Nikolai Cherginets, head of the commission on international affairs and national security of the Belarusian Republican Council, said in an interview with the Interfax agency on the same day that Lukashenka's statement “on the possibility of Belarus leaving several integrational organizations . . . was brought on by dissatisfaction with the work of those organizations.” Whether by coincidence or not, the Organization for Regional Integration was mentioned in that interview.

         Cherginets pointed out an economic motivation for Belarus to quit the Organization for Regional Integration, saying “on the territory of the former USSR, a significant number of groups have arisen.  Belarus belongs to most of them and spends enormous funds to support the bureaucracy of these groups.  Meanwhile, nothing changes.”

         The same news agency reported on April 28, citing a “well-informed source in the Russian capital,” that “Moscow hopes that Minsk and Kiev will reach a decision before the end of May on the formation of a Single Economic Space between Russia, Belarus, Kazakhstan and Ukraine.”

         Russia considers the establishment of a single economic zone between the four countries a priority and hopes to receive an answer from the Ukrainians and Belarusans before the end of May," Interfax quotes its source as saying.  The unnamed Russian official continues that, if Kiev and Minsk reject the idea, “we will not make a tragedy out of it,” although a negative response from Belarus “will define the future of the union between Russia and Belarus.”

         As for Ukraine, the source said that “if Kiev is not prepared for serious economic decisions and cannot agree on common rules for entrance into the WTO, we can still talk on some level about customs technology at truck [border] crossing points and maybe about other protective measure [by Russia].”

         Grigory Rapota, secretary general of the EURASEC, appeared on the Russian radio station Echo of Moscow April 30 and stated that the conditions under which Russia entered the WTO would be the basic guide for the other EURASEC member-states-Kazakhstan, Belarus, Kyrgyzstan and Tajikistan.  Rapota confirmed that the EURASEC members are now working on synchronizing conditions and timetables for joining the WTO.  The most advanced of these, in terms of customs duties, Rapota said, was the Russian-Belarusian relationship.

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