Economic Relations

 

Until very recently Germany was Bulgaria’s biggest trade partner. Last year this leading position was overtaken by Russia, due to an increase in the energy trade. Still, German investors continue to be a leading factor in the Bulgarian economic and social development. Their contribution can be felt well beyond the economic sector. Together with the German Embassy and the German-Bulgarian Chamber of Commerce, these German companies advocate and implement vocational training for Bulgarian students – a proven method for decreasing youth unemployment.  

 

The lack of a qualified workforce, corruption and lack of transparency in the Bulgarian judicial system are among the factors that hinder foreign investment. Another drawback is the concentration of media ownership. Similar concerns were raised by the European Commission in its most recent report. “All these issues,” Mr. Hoepfner concluded, “are common for countries in transition, and Bulgaria is still in this phase. The country has come a long way, but there is still a long road ahead.”

 

Active civil society and independent media are crucial elements in establishing a stable democracy and market economy, he said, praising the recent upturn of civil engagement in Bulgaria. At the height of the popular protests in February, German observers raised concerns about the nature of the political forces behind them. They were worried that austerity policies – promoted by Germany as a tool to maneuver out of the crisis – may be challenged by the extreme right and the extreme left. This kind of opposition is seen in countries all across Europe. This is not the case in Bulgaria, Mr. Mr. Hoepfner assured. The country has demonstrated prudent fiscal discipline, which allows some flexibility – putting austerity in a more social context.

Mr. Mustafa Yurdakul
Deputy Chief of the Turkish Diplomatic Mission in Sofia

Mr. Yurdakul talked about the future development of the Turkish-Bulgarian relations in the context of globalization, integration and interdependence. The political, economic and cultural relations between Turkey and Bulgaria have deep historical roots, he said. In recent years, bilateral dealings have deepened and expanded. Turkey would like to sustain and enhance this cooperation, promoting sovereign equality and mutual interests. To illustrate the long-term vision for the development of Turkish-Bulgarian relations, the Turkish diplomat presented the main pillars of Turkey’s foreign policy, focusing on the Balkans.

Turkish Foreign Policy

 

The leading principles in the Turkish foreign policy are the balance between liberty and security and integration within the region. “Our goal is to achieve maximum cooperation with all our neighbors.” This would allow more effective implementation of wider and far-reaching policies. Effective diplomacy is an important part of this process. Improving security in the region depends on political dialogue, economic interdependence, and the implementation of innovative mechanisms in building cross-cultural bridges of dialogue, understanding and mutual respect.

 

In addressing common challenges, Turkey is contributing to several international organizations such as the UN, NATO, the Council of Europe and many newly created organizations such as the African Union, the Shanghai Cooperation Organization and the Association of Southeast Asian Nations. As an active member of the international community, Turkey maintains close ties with other global actors such as the EU, USA and the Russian Federation. In recent years, Turkey has been actively working to improve relations with  emerging powers in Africa, Asia and Latin America.

 

The Balkans

 

The Balkans is a priority for Turkey, not only from political, economical and geographical perspectives, but also due to its historical, cultural and human ties with the region. The Balkans, being the geographical connection of Turkey to the rest of Europe, bears great importance with the special place it had in the historical process that shaped the Turkish nation and the future potential it carries within the context of regional integration and the EU accession objective, which Turkey shares with all the countries in the region. 

 

High level political dialogue, security for all, utmost economic integration and the preservation of the multi-ethnic, multi-cultural and multi-religious social structures in the region constitute the four main pillars of Turkey’s policy in the Balkans, shaped by the principles of “regional ownership” and “inclusiveness”. “We want security and safety for all regional countries and for all ethnic and religious groups, without making any discrimination,” Mr. Yurdakul said. The 20th century was a century of division. We need political will to turn the 21st century into a century of reintegration.

 

Turkey is assisting the Regional Cooperation Council (RCC) in developing regional cooperation in Southeast Europe and promoting the integration of the region to the European and Euro-Atlantic structures. Being among the founding members of the RCC, Turkey contributes substantially to its budget and plays an effective role in joint regional projects. The most concrete examples of Turkey’s contribution to good neighborly relations and regional cooperation are the trilateral consultation mechanisms between Turkey-Bosnia and Herzegovina-Serbia and Turkey-Bosnia and Herzegovina-Croatia. 

Political Relations

 

At the moment Turkey and Bulgaria enjoy good neighborly relations. High-level visits between the two countries are exchanged on a regular basis. A number of effective bilateral mechanisms are presently working well. Moreover, the two countries collaborate in strengthening regional and international cooperation: Black Sea economic cooperation, southeast cooperation process, NATO and the United Nations.

 

Turkey and Bulgaria share a common mission to strengthen cooperation between countries in the region, enhancing peace, stability and prosperity. Within this overall objective, Turkey supports the full integration of the region into the Euro-Atlantic structures, and appreciates Bulgaria’s support for Turkish accession to the EU. “We believe that the prospective membership of Turkey into the European Union, will further diversify and deepen the Turkish- Bulgarian relations in all fields,” he added, “The multidimensional character of our bilateral relationship provides us with plenty of avenues for cooperation to further mutual interests.”

 

 

 

Economic Relations

 

With Bulgaria's transition to democracy and a free market economy, bilateral trade has improved tremendously. The legal framework, required to improve relations, is already completed. The two neighbors, however, should spare no effort in deepening this cooperation. The Turkish economy is growing rapidly, providing favorable grounds for future cooperation. Bulgaria much benefits from this advantageous position, by promoting cooperation and mutual interests. At present, Turkey is the second largest export market for Bulgaria, after Germany. The basic goods and commodities that are traded are iron and steel, copper and copper products, mineral fuels and mineral oils, plastics and plastic products. Turkish investments in Bulgaria, together with the capital flow coming from third countries, amounts to approximately 1.5 billion euros. There are 1 500 active Turkish companies in Bulgaria, making important contributions to the Bulgarian economy in terms of value added and employment. There are plenty of good examples of Turkish investments in Bulgaria, such as the production plant founded by Şişecam in the town of Turgovishte – one of the biggest investments in the country.

 

Bulgarian Citizens of Turkish Origin

 

Bulgarian citizens of Turkish origin are an integral part of the bilateral relations between the two countries. They contribute to the cultural diversity and economic welfare of Bulgarian society. Moreover, they serve as a bridge between the two countries and deserve to be treated as equal citizens of Bulgaria, enjoying fully their democratic rights. In this context, Turkey believes that Bulgaria has the potential to become a model for multicultural coexistence, which can serve as an example for other countries in the region struggling with the issues of multiculturalism.

 

Full transcript of the lecture >        Audio recording of the lecture >

Mr. Maxim Alyoshin
General Consul of the Russian Federation in Varna

On July 18th 2013, Mr. Alyoshin took part in a tripartite meeting on “The future of Bulgarian relations with Russia, Turkey and Germany,” attended also by H.E. Matthias Höpfner, Ambassador of Germany to Bulgaria, and Mustafa Yurdakul, deputy chairman of the diplomatic mission of Turkey in Sofia. The Russian diplomat lost no time with greetings and introductory remarks, going straight to the issue at hand – the energy sector. The most sensitive area (for both Russia and Europe) is the supply of natural gas to the continent. It involves as much business and economic interests as geopolitical incentives. Approximately one third of the gas and oil in Europe comes from Russia, while Bulgaria's dependence on Russian energy resources is almost 100%. In this competition over the energy supplies to Europe, Russia desperately tries to maintain its dominance, while the West is searching for diversification that will end this dependency. 

South Stream

 

A crucial element in this rivalry is the project “South Stream,” a pipeline planned to transport natural gas from Russia to Italy via Bulgaria. The construction of the pipeline was (and still is) an important strategic project for Russia. Thus, it is not a surprise that Mr. Alyoshin’s opening statement centered on it. He cited reports and resolutions, demonstrating that in the summer of 2013, there was absolutely no doubt about the implementation of the project. In December 2011, the Bulgarian government declared this project to be “of national importance.” In April 2013, the Russian government even issued a proposal to carry consultations on changing EU legislation with regard to the construction of “South Stream.”

 

“The implementation of these changes is to be concluded by the middle of of June,” asserted Mr. Alyoshin, adding that the building permits were expected in September or October of the same year. This optimism was not groundless, since a month later, the Environmental Council of Expert to the Ministry of the Environment in Bulgaria approved the track for the construction of the pipeline on the territory of the country. 

 

Next, Mr. Aloshin discussed Russian decision to terminate the participation of Bulgaria in the Trans-Balkan oil pipeline “Burgas–Alexandroupoli.” Disputing the decision in March 2013, Bulgaria insisted on discrepancies in the inter-governmental agreements. “In relation to this rift,” Mr. Alyoshin detailed, “the position of Sofia has no legal grounds.” This resolute statement concluded the conversation on the energy sector.

 

Nuclear Energy

 

The development of the atomic energy sector in Bulgaria was another important topic in Mr. Maxim Alyoshin’s speech. At the center of this discussion were the failed negotiations for the construction of the NPP “Belene.” It is a nuclear plant in Bulgaria that started construction back in the 1980s, but was later abandoned. In 2011, the Bulgarian government re-opened the subject, initiating talks with Russia. Mr. Alyoshin summarized the developments of these negotiations. Russia had a preliminary agreement with the Bulgarian government, from January 2012, for the construction of two nuclear reactors for “Belene.” Moreover, the national referendum, carried the same year, demonstrated that the Bulgarian people supported the project. However, in February 2013, the Bulgarian National Assembly adopted a decision for the final termination of the project. At the same time, several political parties advised Russian diplomats that Sofia's position could be reversed.

 

Next, Mr. Alyoshin turned to another central subject – Kozloduy, the single functioning nuclear power plant in Bulgaria. He expressed Russia’s hopes that Bulgaria would reconsider Russian involvement in the construction of the seventh nuclear reactor of Kozloduy.

 

Russian investments in Bulgaria

 

Russian investments in Bulgaria are substantial, he insisted, citing figures of approximately $2 billion for the past 10 years. “In these statistics,” he added, “Bulgaria does not account for the large amount of Russian capital entering into Bulgaria from third countries.” Private investments in real estate are also increasing. This benefits local construction companies, and Bulgarian tourism as a whole. “A growing number of Russian citizens own properties in Bulgaria,” Alyoshin said, adding: “This means work for you, Bulgarians!” Thus, he insisted, future relations depend greatly on the efforts of the Bulgarian government to ease the visa regime for Russian citizens.

 

Similar demands were made in discussing bilateral trade. At present, the trade balance between the two states is low. Still, Mr. Alyshin said, Bulgaria could become a leading exporter of eco-products to Russia. Efforts need to be made in reviving competitive production for the Russian markets. Mr. Alyoshin, however, failed to address the issue of high taxes and tariffs, imposed by Russia, hindering trade between the two countries. Instead, he insisted that Russia is ready to openly discuss offers and joint-projects with Bulgaria. He concluded his lecture with the following message: “Make us an offer! Russia has money!”

Conference: "The Future of Bulgarian Relations with Germany, Turkey and Russia"
Lectors: H.E. Matthias Höpfner, Mr. Mustafa Yurdakul, and Mr. Maxim Alyoshim
Organized by: Future Workshop Bulgaria and the Atlantic Club in Bulgaria
Venue: Vila Marciana, Padina
Date: 18.07.2013
H.E. Matthias Hoepfner
Ambassador of the Federal Republic of Germany to Bulgaria

Mathias Höpfner is a German diplomat, Ambassador to Bulgaria from 9 September 2009 to 8 August 2014. 

 

Previous appointments: Ambassador to Canada; Deputy Director of the Economic Department of the Ministry of Foreign Affairs; Head of the office of Foreign Minister; Deputy Chief of the Mission in Tripoli, Libya; Ambassador to Indonesia. 

 

Full transcript of the lecture >

Energy Sector

 

In discussing another volatile subject in European politics, the German diplomat noted the importance of Russia. “Energy security for Europe,” he also said, “requires diversification and efficiency, which includes the development of renewable sources.” In regard to Belene, Mr. Hoepfner explained that Germany is phasing out all nuclear reactors. However, this is an issue of national competency. Bulgaria should make its own choice, grounding its decision on sober, economic calculations. The construction and maintenance of a NPP is an expensive endeavor that compels serious consideration.

 

The European Union

 

“The EU is not a mere economic alliance, but a union of values,” Mr. Hoepfner asserted. The recent economic crisis, however, has compromised this premise. If the Union is to succeed in the long run, Europe needs to galvanize political will to protect them. He addressed article 7 of the Lisbon Treaty, and the infringement procedures of the European Commissions. “In this general political framework,” Ambassador Hoepfner said, “the topic of Schengen has become a difficult one.” Germany has assisted Bulgaria in meeting the technical requirements in joining the Schengen area, but the general political context slows down the process.

 

Yet, Mr. Hoepfner expressed his optimism for the future, praising the role of the young people in European, and most notably “the Erasmus generation.” Our common future, he said, is in the hands of these cosmopolitan, well educated polyglots, actively engaged in the development of their countries. As a result of the Erasmus Program, young people are able to interact with the world beyond the borders of Schengen or the European Union. “This is what Europe is all about,” he concluded, “this is the future of our relations.”

H.E. Hoepfner spoke alongside his colleagues Mustafa Yurdakul, Deputy Chief of the Turkish Embassy in Sofia, and Maxim Aleshim, General Consul of the Russian Federation in Varna, during a conference on “The Future of Bulgarian Relations with Germany, Turkey and Russia.” Mr. Hoepfner welcomed the other two speakers, commenting on the good economic relations with Russia, namely in the energy sector; the importance of the economic boom of Turkey, and the political part played by German citizens of Turkish origins in Berlin. He discussed German-Bulgarian relations within the framework of European integration, speaking on important issues such as Schengen and the energy sector. He criticized the lack of transparency in the Bulgarian legal system, and praised the role of civil society and independent media in building democracy.