Volume 9 Number 4

Fall 2000

Feature

Bulgaria
     Albena Azmanova

In 1997, the European Commission gave Bulgaria poor marks: the country was judged to be far from meeting both the political and economic criteria for membership. Now, less than three years later, Bulgaria has initiated accession negotiations. In what follows, I examine some peculiarities of Bulgaria’s accession preparations, discussing, first, the public consensus in Bulgaria on EU membership and, second, the impact of EU assistance and conditionality on the domestic reform process. After analyzing the principal difficulties facing the country, I conclude with some suggestions for future policymaking.

The "European Consensus"
EU membership is one issue that enjoys a broad consensus among political elites and within society as a whole. Currently, 80.2 percent of Bulgarians favor EU membership (52.1 percent "approve completely" and 28.1 percent "approve somewhat"; Vitosha Research, National Representative Surveys of Bulgarian Population, Age 18 Plus, May 2000). For the sake of comparison, it is useful to note that the population is split approximately in half on prospective NATO membership. The majority of Bulgarians believe that embarking on accession negotiations with the EU is the second most-important event for their country in the twentieth century, comparable only to the regime change in 1989. No political party has been able to monopolize the issue of accession as a distinctive or exclusive feature of its political identity.

Before 1989, Bulgaria was the only country of the former Soviet bloc that had managed to maintain a cultural affinity with both Western Europe and the USSR, and to do so without any particular tensions. In contrast to those countries that hosted a significant number of Soviet troops on their territory, Bulgaria was able to turn toward the EU without distancing itself sharply from Moscow. A large portion of the population and a certain part of the political elite still believe in the importance of maintaining long-established cultural and economic links to Russia. These networks could eventually prove an asset for EU–Russia relations. The strong "European consensus" after 1989, it should be noted, did not result from a serious public debate. At the time, there seemed to be no alternative: Bulgaria had to turn toward Europe.

Today, Bulgarians see the benefits of EU membership mostly in terms of personal mobility and economic assistance. Surveys show that 58 percent of the population points to freedom of travel and 49 percent to economic recovery as the two most significant improvements expected to flow from accession (Alfa Research, February 2000).

Disturbingly, this consensus on EU accession has become a substitute for the lack of public agreement on economic reforms. While four of every five Bulgarians are in favor of EU membership, only 44.1 percent think that a free-market economy is right for Bulgaria; 31.8 percent believe that it is wrong. The number of those in favor of a market economy has decreased by 6.9 percent since 1998 (Vitosha Research, National Representative Surveys of Bulgarian Population Age 18 Plus; surveys conducted in May 1998, May 1999, and May 2000). Political elites have compensated for the lack of public enthusiasm for economic liberalization by resorting to the notion of the "European consensus," even though some 80 percent of the EU acquis entails reforms Bulgaria would have to undertake to make its economy viable in a Western context. Although this substitution—this cover, as it were—seems to have purchased public acquiescence in the short term, it could prove dangerous in the long term.

Using the prospect of EU membership to sugarcoat unpopular reforms has reinforced the link between domestic political credibility and successful negotiations for accession. Taking credit for the Union’s invitation to start negotiating, the current government has turned progress toward membership into the most palpable measure of the success of its reforms.

But the population’s belief in the likelihood of joining the EU in the foreseeable future is steadily diminishing: only 6.9 percent finds it very likely and 29.1 percent finds it only somewhat likely that Bulgaria will become a full member of EU within the next five years. This contrasts with 15.9 and 43.6 percent in 1998. Public enthusiasm has risen sharply after the EU Council of Ministers, on December 1, adopted a decision to drop the visa requirement for Bulgarians (approval of the EU parliament is pending). Yet this optimism is likely to be short-lived, with public debate refocusing on the EU Commission’s negative view of Bulgaria’s economic development, as stated in the Commission’s report of November 8.

Overreliance on the lure of the EU to anesthetize the country to painful reforms frees Bulgaria’s political classes from the responsibility of making and explaining hard political choices. At the same time, it forestalls the emergence of a population prepared to embrace the reforms. When they imagine the transition to a market economy, Bulgarians tend to emphasize not personal initiative and achievement but high living standards. Economic liberalization, as a price to be paid for future membership, is endured as a sacrifice instead of being embraced as an opportunity for personal achievement. Indeed, the corrupt and insecure economic environment of the past decade has only deepened prevailing passive attitudes toward economic enterprise. Four out of every five Bulgarians deny that it is possible to earn an honest living in Bulgaria (Alfa Research, survey conducted December 2–10, 1999). Thus, the idea of "joining Europe" has not developed into a strong motivational myth the way Marxism had in some of the communist countries, nor has it provided a work ethic in the same sense that Protestantism purportedly stimulated the development of capitalism in the Anglo-Saxon world.

Supplanting serious discourse about the challenges of economic reform with an alluring image of EU membership has also created a sense of entitlement on which Bulgarians now ground their expectation of joining Europe. Most Bulgarians now feel they should be rewarded with membership, not simply with economic assistance, because they were willing to accept liberal reforms that, in turn, triggered a steep drop in living standards. In the same vein, Bulgarians expect compensation for having cooperated with the Allied forces during the Kosovo crisis, even though this damaged their own economic interests and violated traditional Slav solidarity with Serbia.

What economic or political interest does the EU have in Bulgaria’s accession? Not much. Compared with Poland’s huge markets or the central geographical location of Hungary and the Czech Republic, Bulgaria has little to offer. Bulgarians are well aware of their country’s marginal importance in the eyes of EU member states, nor does the country have special advocates in the EU, such as France for Romania, or Sweden and Finland for the Baltic States. The added value of Bulgaria’s accession (apart from the cultural diversification of Europe) mainly concerns the stability of the region and the continent, as well as the security of the EU’s frontiers. At the moment of accession, Bulgaria’s borders will become the Union’s external frontier, pending Turkey’s membership, which is likely to come much later.

The impact of preaccession assistance
Between 2000 and 2002, Bulgaria will receive EU assistance amounting to 280 million euros a year—one of the highest overall allocations in the region. Between 1990 and 2000, Bulgaria was allocated over one billion euros from Phare alone. The strict conditionality of accession requirements has given a clear direction to policy changes in Bulgaria. The difficulties in implementing EU assistance have three sources: corporate interests, fear of political unpopularity, and the public’s perception that certain issues are irrelevant.

Corporate interests were obviously delaying factors in the privatization of major enterprises in which members of the political elite (from across the spectrum) have vested interests. Given the pressure exerted by international bodies, foot-dragging and postponement of reform have been the only viable forms of resistance. These delays have had grave consequences, however, because of the gradual devaluing of assets eventually offered for privatization.

The second problematic area involves state aid and nuclear safety—still unresolved issues. The EU made the opening of negotiations with Bulgaria contingent on closing four of the six reactors of the Kozloduy nuclear power plant, the biggest energy supplier in the country. At the end of 1999, although aware of the unpopularity of such a decision, the government signed an agreement that covered the closing of the reactors. This was against Bulgaria’s immediate economic interests and was highly unpopular measure because cheap energy inputs allow for low production costs in other industries.

Bulgaria’s export of energy to Turkey, Greece, and Yugoslavia is also an important source of revenue for the state budget. In addition, international experts have judged only two of the reactors to be dangerous; the request to close the other two was, in large part, prompted by the West’s worries about Chernobyl-type reactors. The Kozloduy issue, therefore, is seen by ordinary Bulgarians as another case where their all-too-real interests are being sacrificed to the West’s prejudices and paranoia.

The third source of problems concerns issues such as environmental protection, gender equality in the working place, standardization and certification procedures, consumer protection, as well as the establishment of institutions for the implementation of the EU acquis. Programs in these spheres have been met with reluctance. They are not thought to be as relevant, say, as reform in agriculture or stimulus for small businesses. Implementation of EU programs in these areas has raised the public’s awareness of them, without convincing Bulgarians of their momentousness. But the European Commission continues to draw attention to gender inequality, along with discrimination against the Roma, as the unresolved human-rights issues that could still damage Bulgaria’s chances of accession.

Generally, EU assistance to Bulgaria has had a significant impact on the structure of civil society. EU-sponsored programs, for example, maintain a network of NGOs in the country. The proliferation of such foreign-funded groups contrasts with the scarcity of indigenous and domestically supported civil-society organizations and the weakness of trade unions. Since NGOs in Bulgaria often function as think tanks rather than as lobbyists for specific economic and social interests, their value lies not so much in organizing and representing civil society as in assisting the reform efforts of various elites.

The main obstacles to accession
Two factors motivated the EU’s largely political gesture of extending an invitation for accession talks to Bulgaria at the Helsinki European Council in December 1999, even though the country was considerably behind the other candidates (Slovakia and Romania excepted). The first was the fear of the consequences of Bulgaria’s marginalization for destabilization in the Balkans. The second had to do with the invitation to Romania under French pressure. Once Romania had been invited, it seemed only logical to extend an invitation to Bulgaria as well.

The Bulgarian government has suggested the end of 2006 as a target for accession—an ambitious date. Bulgaria’s strongest arguments for accelerating the accession process are the country’s macroeconomic stability and its rapid progress in passing necessary legislation. But all this diverts attention from serious obstacles of an economic and institutional nature.

As far as the business climate is concerned, the current economic stability is ensured by a currency board and strong state regulation. It is not the result of a functioning market economy. After a haphazard privatization and a failure to stimulate small enterprise, Bulgaria now suffers from an entrepreneurial vacuum. Slow structural and financial reforms and a primitive market infrastructure have created a poor environment for both foreign investment and domestic economic initiatives. With its weak and still centrally managed economy, Bulgaria would be unable to resist the competitive pressure of EU markets.

The restrictive conditionality of EU import policy has cast small and medium-size businesses in Bulgaria, on which a flourishing middle class depends, into a strange predicament. With the population’s very low consumer capacity and the lack of a reliable credit system, the health of small businesses in Bulgaria is clearly dependent on foreign markets. Indeed, exports to the EU already represent more than half of Bulgaria’s foreign trade. Behind these figures, however, lies the fact that EU imports from Bulgaria consist mainly in raw materials and semiprocessed metallurgical materials—low-value-added products of Bulgaria’s outdated heavy industry. Western Europe is unlikely to provide markets for Bulgaria’s new small businesses.

Bulgaria lacks, as well, the institutional and political framework that would facilitate economic enterprise. The importance of having a properly functioning public administration, for promoting economic growth and attracting foreign investment, has long been completely neglected. The reform of public administration has finally started but its implementation is in an early phase and no improvements are yet visible. One problem with the current civil service is that it sees and values itself as the means for the "preservation of a strong, centralist state." Additionally, the public administration’s political dependence is signaled by high turnover at the ministries whenever there is the slightest reshuffling in the government. The quick progress achieved in legal harmonization, moreover, does not bring Bulgaria much closer to satisfying EU membership criteria, since the institutional capacity to apply the acquis is still lacking or underdeveloped.

The poor state of the judiciary may be the most alarming problem within the Bulgarian political system. The budget for the judiciary is about a fiftieth of the average budget of comparable EU countries. What is even more worrisome is that the judiciary cannot be considered independent. For instance, the involvement of the executive (primarily the Ministry of Justice) in nominations to the judiciary and approval of its budget is substantial.

A decade after 1989, the Bulgarian state has retained its traditional place at the center of economic life. It is a historical irony that, since 1997, Bulgaria has had a liberal government that is, at the same time, staunchly centralist. The state retains significant control over most economic actors. The overbearing licensing and registration regime to which businesses remain subjected is the bureaucracy’s instrument of choice for exercising its control. It allows discretionary intervention and opens channels for corruption. Policies may be and are adopted without consulting relevant economic actors or concerned elements of society. Important programs sponsored by the EU, such as the Sara program for providing direct credit and training to small business, as well as programs for the development of civil society, have encountered significant resistance from the government simply because these programs envisaged direct communication between donors (EU and the World Bank) and beneficiaries (small businesses and NGOs) without the mediation of the state.

Paradoxically, the channeling of Western financial assistance for liberal reforms through the Bulgarian state has only reinforced the latter’s preeminent position. A similar paradox follows from the EU requirement that the administration must be able to enforce the acquis; this has lead to an increase in the number of administrative services and agencies and not to any serious downsizing of the administration or to any streamlining of its procedures. As a result, the goal of administrative reform—facilitating economic transactions and decreasing budgetary burdens—has not been attained.

Finally, much of the tension surrounding Bulgaria’s prospects for accession to the EU arises from miscommunication among EU institutions, the Bulgarian government, and the Bulgarian people. Ambiguities begin with the EU’s double message. While the EU has announced that all candidates have an equal chance of accession, fewer chapters of the acquis are open for negotiation with Bulgaria and Romania than with the front-runners, thus consigning these two countries to the back of the queue. Although Bulgaria is repeatedly commended for making faster progress than Romania, the two countries are almost always lumped together.

Further down the chain of failed communication, the Bulgarian government has painted the EU’s invitation for negotiations as an official acknowledgement of the country’s substantive progress, even though the invitation was, in reality, a political gesture in the wake of the Kosovo crisis. Political rhetoric has also created the misleading impression that talks with the EU boil down to the "harmonization of legislation," a path down which Bulgaria is advancing rapidly. The Bulgarian government aims to open all of the chapters for negotiation early next year.

Given public expectations, further delays in Bulgarian accession are easily explained away as a lack of political will on the part of EU member states. This is a potentially explosive interpretation and one that threatens to undermine both the population’s commitment to EU membership and its commitment to reforms. Surveys already register a slight, but persistent, tendency toward decreasing support for accession. Between 1998 and 2000, the blanket approval of EU membership has dropped by 6.7 percent (Vitosha Research, National Representative Surveys of Bulgarian Population Age 18 Plus, conducted in May 1998, May 1999, and May 2000). If delay is blamed on Western indifference or contempt, then the government’s own credibility will also be at risk, due to the close link intentionally established between EU membership and successful governance.

Flawed communication has thus spawned misperceptions that must urgently be addressed. EU authorities need to make it clear that the start of negotiations does not, by itself, mean that Bulgaria is any closer to joining the Union. Membership is not simply a matter of adopting some 80,000 pages of EU legislation but depends, above all, on specific results flowing from the creation of a competitive market economy. Further differentiation between the candidate countries would also help here, remedying the impression that Bulgaria is being underestimated by being pigeonholed indiscriminately with Romania.

For its part, Bulgaria’s government needs to take a more realistic approach toward membership. In fact, a healthy sense of realism is already noticeable in the population. While polls register a general decrease of enthusiasm for EU accession, there is a small increase in a more cautious and realistic approval. Although complete approval of EU membership has decreased by more than 6 percent since 1998, the number of those who "approve somewhat" has risen by 4.8 percent.

The government could build on this growing realism by adopting a new approach in its communications with society. Such a new approach should have two objectives. First, to create a public opinion that is well-informed about EU accession and that will not be burdened with skewed or incorrect expectations. Second, the government should strive to loosen the misleading link between difficult, yet necessary, reforms and EU membership. The latter should be described as an outcome of successful domestic reforms rather than as a status symbol making unpopular reforms more palatable. Most importantly, domestic reforms have to be motivated internally. They need to be embraced by the population (rather than endured), regardless of EU membership. This shift of perspective would convey a sense that reforms in the country are intentional political choices, based on the needs of domestic society, rather than capitulations to demands from Brussels.

Bulgaria is unlikely to be in the first wave to join the EU. As result, it will be necessary not only to prolong but also to preserve the credibility of the accession process as well as the morale of the population. This can better be achieved through a realistic approach to the task—by keeping Bulgaria’s own interests at the forefront of the national debate, rather than by raising false expectations of early entry or by blaming outsiders for inevitable delays.

Albena Azmanova teaches political philosophy at the Institut d’Etudes Politiques de Paris. She has worked as an expert on European Commission programs for preaccession assistance to Bulgaria.

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