South Stream: Bulgaria in between a Rock and Hard Place

Novinite.com is publishing an article from reader Adrian Bart-Williams, a UK lawyer with a Masters in International Economic Law, Justice and Development from the University of London, who is closely following developments in Central and Eastern Europe and would like to share his view on the suspension of the South Stream pipeline project announced last week.

We all have principles that guide how we think things should be. But there is a harsh dividing line between what we wish and the reality of the situation. It’s called pragmatism.

As a British Lawyer, it has been interesting observing the endless arguments that are been advanced in Bulgaria, the EU and Russia about South Stream. These have continued even after the Russian President, Vladimir Putin, announced that the project would no longer go ahead, blaming Bulgaria for its refusal to give the project the essential go ahead. There are some who think that this is a bluff. However, for me this is not the issue.

In principle, many would think that Bulgaria should have the right to make a decision that it thinks is its own interest. However, it cannot do what it wants because it is subject to restrictions. Arguably, these may be self imposed ones but nevertheless they are restrictions.

Materially, Bulgaria is a member of the EU. She joined it because it was felt to bet in its economic interest to do so. It and Romania are seen as the poorest countries in the EU. The idea being that joining the organisation brings various economic benefits and access to EU funds. Access to funds requires the country to behave in a manner that the Union approves of. This affects so many difference spheres of its society with the effect on its citizens. In this instance it is about law. Gazprom, a Russian state company, wants to own both the pipeline and supply the gas, The European Commission says that according to its rules, the same company cannot own both and clearly it is fearing a monopoly situation. South Stream would clearly mean that Bulgarian gas supplies would be more secure. The project would render the Ukrainian pipeline surplus to requirements thereby avoiding the interruption of suppliers. This has occurred when the Russian accused the Ukrainians of siphoning gas meant for EU customers resulting in the cessation of supplies. The root cause being that non payment by the Ukrainians means that Gazprom stops supplying them.

At the present time, the EU has had to step in to help facilitate a temporary agreement between Russia and Ukraine, which has resulted in the latter having to prepay for gas, much like a domestic customer using a prepay electricity or gas meter. The newly introduced power supply cuts in Ukraine clearly demonstrate that it cannot afford to pay for its gas. Trust between the Russian and the Ukrainian governments are at an all time low in the modern era. It will take many years for such trust to be re-established. In this respect, one does not need to choose sides or make any determination as to who is right or wrong in this conflict. Even if we do, it will not bring about a resolution as their respective narratives are entrenched for reasons they believe to be right. As a lawyer, I have always held the view that most court cases that go all the way to trial and end up being decided by a Judge do so because both sides believe they are right. In relation to divorces, I adhere to the view that there are normally three sides as to the reasons for the breakdown. His side, her side and the truth. There is therefore a strong argument that it is best for Bulgaria and the EU generally, for the sake of stability, if an alternate gas route that avoids Ukraine, would be best.

However, Bulgaria was put in a position where if it gave the go ahead for the pipeline it would have resulted in the Commission initiating a case against them and with hefty fines that could have followed. It is interesting that Serbia, a prospective EU member and Hungary, an actual EU member, felt that they would go ahead regardless of the views of the commission. In the case of Serbia, prospective membership is the issue and they may hold the view that no new members are likely to be added soon to the 28 member block. Moreover, they are not subject to the jurisdiction of the European Commission and it consequential fines. In the case of Hungary, Viktor Orban, was reported to have been recently described as a “neo- fascist dictator” by US Senator and former Presidential candidate John McCain. Orban’s report was to say that this comment was an attack on Hungary’s national independence.

Smaller states have always to some extent been at the mercy of bigger states. Alliances are formed by smaller states with bigger states because the former believe it is in their best interest. A former enemy becomes a friend. After the Nazis were driven out of Poland by the Russian during the second world war or the great patriotic war (take your pick as to the description you would like to apply), who would have imagined that German and Poland would be firm allies bearing in mind both the occupation, Auschwitz and the killing of many poles during the German occupation. Now the poles see the Russians as the great danger. There are numerous examples of unexpected alliances. As the saying goes “my enemy’s enemy is my friend”.

In the case of Bulgaria, South Stream would have obvious benefits in terms of jobs and transit fees. It is arguable that it would bring better energy security but this would be disputed by those who believe that energy dependence on Russia needs to be reduced. No doubt the Bulgarian government would like to have excellent relations with both the EU and Russia, making wider and narrow economic decisions as it sees fit. The reality is that Bulgaria feels that it needs the EU more than Moscow, therefore it is not surprising that it choose not to annoy the EU Commission. A wise decision. It is striking to read about meetings between Russia and the EU to seek to find a solution to the impasse. The reality is that joining any kind of alliance curtails the freedom of a small country. Likewise staying out of an alliance can have its negative effects.

In short, Bulgaria does not have the freedom that maybe it would like. But it has to be pragmatic as all such nations must do. When you need someone more than they need you, you have to be. It does impinge on national interest but it is the reality. We often have to deal with reality as it is rather than what we would like it to be. A reality check.

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