Tag Archives: south stream

Bulgaria

Bulgaria’s Borissov (and EU) gets reprieve from dissatisfied voters

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Leading EU officials will be relieved that Boyko Borissov is likely to begin a third stint as prime minister, but Bulgaria faces lingering concerns about its economy and corruption. (Facebook)

It’s been nearly two-and-a-half years since the last election, but Bulgarian prime minister Boyko Borissov’s center-right party won just about the same percentage of the vote that it did in 2014 — around 32.7%. 

That performance was good enough for an 11-seat increase in the National Assembly (Народно събрание), making Borissov more likely than not to retain the premiership. It’s a remarkable turnaround after Borissov, dogged by allegations of corruption within his government and after his party suffered a humiliating defeat in last November’s presidential election, resigned earlier this year and triggered snap elections.

If he can form a governing coalition, it would be Borissov’s third non-consecutive stint as prime minister, his first coming in the aftermath of the global financial crisis in 2009. At a time when Russian president Vladimir Putin is working to undermine European democracy, top European leaders and EU officials alike view Borissov as a soothing center-right ally firmly devoted to European integration. EU leaders will certainly far prefer a Borissov government with Bulgaria set (for the first time) to assume the six-month rotating EU presidency in early 2018.

As both an EU and NATO member, Bulgaria is a key ally on the eastern periphery of the European continent. It’s a northern neighbor of the economically depressed Greece and the increasingly autocratic Turkey and just across the Black Sea lies a divided Ukraine and Russian-annexed Crimea. These days, it’s an increasingly tough neighborhood. Despite European anxieties about reliance on Russian natural gas, Borissov last year was already considering the resurrection of the on-again, off-again South Stream gas pipeline from Russia (talks began in 2006, but ended after Borissov won the 2014 election), even as the country’s new president called for better relations with Russia. While the number of ethnic Russians in Bulgaria is negligible (far less than ethnic Turks, which comprise nearly 9% of the population), a large majority of Bulgarians belong to the Orthodox church, sharing important cultural touchstones with Russia.

Earlier this year, voters seemed likely to punish his party, the center-right Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България) for years of economic malaise and widespread corruption. GERB’s presidential candidate last November, Tsetska Tsacheva, the former chair of the National Assembly, lost a second-round runoff by a 23% margin to Rumen Radev, an independent and former Bulgarian Air Force commander endorsed by Bulgaria’s center-left.

At the time, coming days after Donald Trump’s successful, if once implausible US presidential campaign, Radev’s victory was yet another incremental geopolitical victory for Russian president Vladimir Putin, given Radev’s call for closer ties with Russia. Indeed, Tsacheva’s defeat was the proximate cause for Borissov’s resignation.

Instead, after the March 26 elections, GERB won 95 seats, the largest bloc in the National Assembly. Continue reading Bulgaria’s Borissov (and EU) gets reprieve from dissatisfied voters →

Greece, Russia

A Russian bailout may have always been ‘Plan B’ for Tsipras

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junckertsiprasPhoto credit to ELTOS/ELTA.

It may have seemed odd that, within hours of taking office, Greece’s new prime minister Alexis Tsipras struck out at the European Union to delay and ultimately weaken the bloc’s resolution to extend sanctions against Russia and certain actors within the Russian government.Greece Flag IconRussia Flag Icon

The incident shed light on an under-explored element of policy preferences of Greece’s new governing party, the leftist SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς), including its reluctance to embrace NATO and the traditional military and security alliance that links the United States and the European Union. Tspiras, who has visited the Kremlin several times, has forcefully opposed the EU sanctions against Russia stemming from its involvement in the unrest in eastern Ukraine.

Furthermore, Tsipras’s choice to form a coalition with the right-wing, anti-austerity Independent Greeks (ANEL, Ανεξάρτητοι Έλληνες), and to appoint ANEL’s leader, Panos Kammenos, as defense minister, brought into government a brand of right-wing nationalism with roots in traditional Greek Orthodoxy and plenty of euroscepticism.

Throughout the campaign and, indeed, for years, Tspiras has publicly evoked confidence, if not outright cockiness, that he would be able to negotiate a deal to lighten Greece’s debt load if elected to power. Presumably, many commentators believed that meant Tsipras was willing to engage EU elites, including German chancellor Angela Merkel, in a game of ‘chicken’ over Greece’s potential exit from the eurozone. That’s probably still true.

But the common view among most economists is that Greece’s leverage on this point is growing weaker. Merkel and others have privately briefed that the eurozone is much stronger now than in 2012 when the ‘Grexit’ issue first became a real concern, and they don’t believe that the contagion from a Grexit today would be considerable. Greece’s turmoil can be isolated, but caving to the demands of the Tsipras government could embolden radical leftists elsewhere in Europe, especially in Spain, where the leftist Podemos movement now leads polls in advance of elections later this =year. The European Central Bank last week essentially backed Merkel’s view by announcing that it would refuse to accept Greek bonds as collateral, pushing the burden of risk on Greek debt exclusively upon the Greek central bank. Greek finance minister Yanis Varoufakis clashed publicly with German finance minister Wolfgang Schäuble last week as well, noting that he didn’t even ‘agree to disagree’ with Schäuble over the Greek debt standoff.

But Kammenos’s comments yesterday about Greece’s ‘Plan B’ make it clear that the Tsipras government believes it has another, potentially more explosive card it can play:

“What we want is a deal. But if there is no deal – hopefully (there will be) – and if we see thatGermany remains rigid and wants to blow apart Europe, then we have the obligation to go to Plan B. Plan B is to get funding from another source,” he told a Greek television show that ran into early Tuesday. “It could the United States at best, it could be Russia, it could beChina or other countries,” he said.

The United States is certainly not going to undermine Merkel and the EU leadership, especially to bail out a far-left government in Greece. Furthermore, China’s recent history demonstrates that it very rarely makes splashy political moves in foreign policy outside regional Asian politics (such as in Bhutan or Sri Lanka).

That, of course, leaves Russia, which shares a common form of Christianity with Greece in Orthodoxy, and which also happens to be in the middle of the most high-stakes geopolitical struggle with NATO since the end of the Cold War. Continue reading A Russian bailout may have always been ‘Plan B’ for Tsipras →

Russia

Why the West shouldn’t root for Russia’s rouble freefall

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rubles

It might be tempting today for policymakers in Berlin, Washington, Brussels and London to have a moment of schadenfreude at the Russian currency crisis, which seems to deepen by the hour.Russia Flag Icon

But as Russia’s economy significantly weakens, those same officials might regret their glee if it causes Russian president Vladimir Putin to double down on the nationalist rhetoric and geopolitical aggression that’s characterized his third term in office. The Guardian‘s Larry Elliott declared that with today’s collapse, the West has won its ‘economic war’ with Russia and otherwise christened it ‘Russia’s Norman Lamont moment,’ a reference to the British pound’s collapse in 1992:

Back in September 1992, the then chancellor said he would defend the pound and keep Britain in the exchange rate mechanism by raising official borrowing costs to 15%, even though the economy was in deep trouble at the time.

European and US governments slapped economic sanctions against several top Russian officials earlier this year, largely in retaliation for Russia’s annexation of the Crimean peninsula in March and the Kremlin’s continued role supporting separatists in eastern Ukraine. Even today, US president Barack Obama indicated that he would support even more economic sanctions against Russian weapons producers and other companies tied to the Russian defense industry after the US Congress overwhelmingly passed a new anti-Russia bill with bipartisan support.

The last Russian financial crisis in 1998 coincided with slowdowns across the developing world, an ominous sign for the struggling Brazilian, Indian and Chinese economies. It may have even precipitated the 1998-99 Asian currency crisis.

Much of Putin’s support in the last decade and in his first stint as president from 2000 to 2008 rested on the economy’s strong performance. After the embarrassing and impoverishing experience of the Soviet Union’s collapse, the Putin era brought an end to the grinding poverty that characterized the presidency of his predecessor, Boris Yeltsin. Buoyed by rising demand for Russian oil and gas, Putin presided over a boom in the mid-2000s that materially raised incomes across Russia, especially in cities like Moscow and Saint Petersburg.

That continued even through the presidency of Dmitry Medvedev, when Putin, barred from a third consecutive term, instead served as prime minister. But since returning to the Kremlin in 2012, Putin has faced an increasingly precarious economy, and as Max Fisher and other commentators have convincingly argued, the political basis for Putin’s government has shifted from economic grounds to increasingly nationalist and populist rhetoric. That explains the Kremlin’s machinations in Ukraine and its growing political standoff with Europe and the United States, a stand that’s boosted Putin’s previously flagging approval ratings.

If that’s true, though, the risk of Russian aggression is actually rising as its economy deteriorates. There are now several potential catalysts — the currency crisis could easily engender a wider economic recession, oil prices might continue their drop, or the United States and Europe could implement deeper sanctions. In such case, Russian president Vladimir Putin may respond by intensifying his saber-rattling against not only Ukraine, but the Baltic states, southern Europe, Moldova and Kazakhstan, to say nothing of Belarus, Georgia or elsewhere. Continue reading Why the West shouldn’t root for Russia’s rouble freefall →

Bulgaria, Hungary, Russia, Serbia

Beware Putin’s southern European, soft-power front

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vucicputin

Russian president Vladimir Putin travel to Belgrade on Thursday with a warm welcome from Serbian prime minister Aleksandar Vučić (pictured above, left, with Putin) with  parades and fanfare.Russia Flag Iconbulgaria flagSerbia_Flag_IconHungary Flag Icon

Even as a shaky ceasefire between the Ukrainian government and pro-Russian eastern separatists limps forward, US and European policymakers continue to keep a wary eye on the Baltic states and Ukraine. Just over a month ago in Tallinn, US president Barack Obama disabused Putin that NATO would flinch in its response to any Russian attack against any of the Baltic states.

Russian aggression may have nudged Latvian voters into reelecting a center-right government otherwise unpopular after a half-decade of economic malaise and budget austerity, and Russian relations are certain to play a vital role in Ukraine’s snap parliamentary elections in less than two weeks.

Nevertheless, Western strategists may be overlooking Putin’s ability to undermine both EU and NATO resolve through the Achilles’ heel of southeastern Europe by leveraging economic, political and cultural influence in Bulgaria, Hungary and Serbia. While it’s hard to believe that Russia would assume the economic burdens of annexing large swaths of eastern Ukraine and even harder to believe that it would risk World War III by invading Russian-majority territory in Estonia, Russia could easily, quietly and gradually maximize its influence within southern Europe, a region that continues to suffer inordinately from the fallout of the global financial and eurozone debt crises.

Earlier this month, Bulgarian voters went to the polls for the second time in just 17 months. They elected a fragmented National Assembly, though the former pro-European, center-right prime minister Boyko Borissov is likely to return to power with a minority government. One of the first decisions he will have to make is whether to proceed with the South Stream natural gas pipeline, which would carry Russian energy through Bulgaria and to Austria, Hungary and elsewhere in southern Europe. The pipeline is one of the reasons, in fact, that the previous center-left coalition government fell earlier this summer. Continue reading Beware Putin’s southern European, soft-power front →

Bulgaria

Bulgaria election results: Borissov returns to power after 1.5-year break

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borissov

Pity poor Bulgaria. It has the lowest GDP per capita of the entire European Union (around $7,300). It has lost over 19% of its population from its 1988 peak. It is now struggling through the latest European financial crisis with a series of revolving governments, low economic growth and an unemployment rate that today is still over 11%.bulgaria flag

So when Bulgarians voted on Sunday to elect yet another government, they did do so with the same kind of ennui that’s marked so many of the country’s recent, frequent elections and a sense of hopelessness as the country’s youngest, brightest minds look to Germany, London and elsewhere for work.

Boyko Borissov (pictured above), a former center-right prime minister between 2009 and May 2013, is set to return to the office he once held, following a technocratic, center-left government headed by former finance minister Plamen Oresharski that fell in August. Bulgaria has since been governed by another caretaker, Georgi Bliznashki, who warned that Bulgaria’s next government needs to be strong enough to carry through major reforms to pull the country out of its ‘post-communist swamp.’

Borissov is the leader of the Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България), and his main opponent is the Coalition for Bulgaria (Коалиция за България), which is essentially a wider version of the center-left. Bulgarian Socialist Party (BSP, Българска социалистическа партия).

The Bulgarian Socialists won enough seats in the last election in May  to form a governing coalition with the  Movement for Rights and Freedoms (DPS, Движение за права и свободи), a liberal party that represents ethnic Turks and other Muslims.

Among the mounting problems that the government faced was the collapse of Bulgaria’s fourth-largest bank earlier this summer, Corporate Commercial Bank, which froze the accounts of 200,000 Bulgarians. Protests against the government last year failed to result in any substantive change.

This time around, however, they fell far lower, as GERB seemed headed to a clear victory. With just over 42% of the vote counted early Monday morning, GERB led by a margin of over two-to-one:

bulgaria2014

Bulgarians voted Sunday to elect all 240 members of the unicameral National Assembly (Народно събрание), and early results indicated that four new groups would enter the parliament, doubling  the number of parties from four to eight.

In fourth place, however, is a potential coalition partner for GERB, the Reformist Bloc (Реформаторски блок), formed in December 2013 as a liberal electoral bloc that, like GERB, lies on the center-right, that won attention in May’s European parliamentary elections when it won one of Bulgaria’s seats. Together, GERB and the Reformist bloc will hold nearly 45% of the seats in the National Assembly, depending on whether another small group, the Alternative for Bulgarian Development, remains above the 4% threshold needed for winning seats.

That means that Bulgaria’s next government is unlikely to be strong enough to effect the kind of massive reforms that could transform policy on a scale sufficient to stop the country’s economic, cultural and demographic hemorrhaging.  Continue reading Bulgaria election results: Borissov returns to power after 1.5-year break →