Published by Wikileaks & Bivol.bg
id: 244434 date: 1/20/2010 15:16 refid: 10SOFIA47 origin: Embassy Sofia classification: CONFIDENTIAL destination: header: VZCZCXRO2963 OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR DE RUEHSF #0047/01 0201516 ZNY CCCCC ZZH O 201516Z JAN 10 FM AMEMBASSY SOFIA TO RUEHC/SECSTATE WASHDC IMMEDIATE 6656 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY RUEAIIA/CIA WASHINGTON DC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY RUEAWJA/DEPT OF JUSTICE WASHINGTON DC PRIORITY RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY C O N F I D E N T I A L SECTION 01 OF 02 SOFIA 000047 SIPDIS E.O. 12958: DECL: 01/18/2020 TAGS: PREL, PGOV, ECON, ENRG, BU SUBJECT: BULGARIA: THE BORISSOV GOVERNMENT AT SIX MONTHS Classified By: CDA Susan Sutton for reasons 1.4 (b) and (d). 1. (C) Summary: Nearly six months in office, Prime Minister Boyko Borissov's government has started to make good on its promises on rule of law and the economy, winning kudos (and funds) from the European Commission in the process. Although it appears to be backtracking on its initial anti-Russian bluster on energy, the government has otherwise pursued a forward-looking, trans-atlantic agenda, including probable acceptance of a Guantanamo detainee, increased support for Afghanistan, and eager interest in hosting missile defense assets on Bulgarian soil. Five seats short of a majority in Parliament, Borissov has managed his "floating majority" with a deft hand, while exacting strict party discipline from his GERB MPs. With no real opposition to worry about, the biggest challenge Borissov has faced is a lack of an experienced and qualified cadre. End Summary. 2. (C) Former bodyguard and Sofia mayor Boyko Borissov took power July 27, 2009, with a promise to clean up endemic organized crime and corruption, eliminate the culture of impunity within which previous governments and connected business interests operated, and restore Bulgaria's reputation within the EU. On rule of law, the government has started to deliver the goods. It is investigating possible criminal activity of seven former ministers, two of whom have been formally charged. It passed legislation to reform the Ministry of Interior and the State Security Services (DANS) to eliminate overlapping roles and improve interagency cooperation. It established interagency organized crime task forces and implemented new measures against money laundering. The government's initial, dramatic moves on corruption and organized crime, and its success in breaking up two large and infamous organized crime rings (one involving kidnapping and another auto theft) has kept Borissov's public approval rating high. The government's efforts have won kudos from the EU, which has unfrozen nearly USD 300 million in pre-accession funds partially as a result. 3. (C) It is the economy that required even more of the government's attention in its first six months. Inheriting what it described as an 11 percent budget deficit after a spending-spree by the out-going Socialist-led government, new Deputy Prime Minister and Finance Minister (and former World Bank executive) Simeon Dyankov immediately set about putting the fiscal house in order. It hasn't been easy or pain free. Dyankov suspended payments on most government contracts, and subsequently slashed public administration and defense spending in his near-balanced 2010 budget. Bulgaria's unemployment rate has increased from 6.3 percent in December 2008 to 9.1 percent in December 2009, and is projected to hit 11.4 percent in 2010. On the bright side, Bulgaria has managed to avoid IMF assistance, and will probably be the only EU country to meet the Maastricht criteria in 2010. 4. (C) Borissov has kept his Trans-Atlantic orientation and empowered the most pro-U.S. members of his cabinet (including Deputy Ministers Tsvetanov and Dyankov and Defense Minister Mladenov, whom the PM tapped January 20 to take over as Foreign Minister). Despite very tight budgets, he has increased Bulgarian deployments to Afghanistan and made investments in the U.S.-Bulgaria joint training facilities. Bulgaria has taken a strongly supportive stance on U.S. Missile Defense plans in the region, and has offered to host M.D. assets. When asked to consider accepting a Guantanamo detainee, the Prime Minister and Minister of Interior Tsvetanov moved quickly to make it happen, expending political capital to gain the support of opposition parties. (Formal approval by the Council of Ministers on Bulgaria's acceptance of a detainee is expected in January.) 5. (C) On energy Borissov has shown less resolve. After promising a complete review of each large energy project to which the last, Moscow-friendly government entered into with Russia, it appears all of these projects still have some life left in them. The Bulgarians are proceeding with South Stream (but trying to get the best deal possible at each stage), while the Burgas-Alexandroupolis oil pipeline is in a holding pattern. On the Belene Nuclear Power Plant, which has become synonymous with non-transparency and graft, we are hearing disturbing rumors that -- seeing no way to get out of the project and with no means to finance it -- the government is considering giving a stake of the project to their Russian partners. SOFIA 00000047 002 OF 002 MANAGING A "FLOATING MAJORING" AND A TOOTHLESS OPPOSITION --------------------------------------------- ------------ 6. (C) Domestic analysts widely viewed Borissov's decision last July to form a minority government as an irresponsible gamble. Now most agree it was a stroke of genius. GERB's MPs are young and inexperienced, but they show absolute party discipline and loyalty. Our contacts confirm they are improving over time. Borissov continues to depend on the reliable support of the ultra-right party Ataka and the center-right Blue Coalition to garner the additional five votes he needs in Parliament. Relations with the third party in Borissov's "floating majority" -- the center-right Order, Law and Justice -- have disintegrated, but with little consequence for GERB's ability to get things done in Parliament. 7. (C) The real opposition in Parliament, the Bulgarian Socialist Party (BSP) and the ethnic Turkish party Movement for Rights and Freedoms (MRF) are in internal disarray after their stinging electoral defeat in July. Focused on internal power struggles and rebuilding, they represent little resistance to GERB initiatives. Into this void stepped President Georgi Parvanov, the BSP's former head, who has openly and personally criticized Borissov for his handling of the economy and energy policy, and refused for some time to approve the government's sought recall of its ambassadors to the United States and Turkey. The Borissov-Parvanov rift has healed somewhat in recent weeks just as Borissov has warmed up to certain of Parvanov's pet energy projects with Russia. COMMENT -------- 8. (C) This government has shown the political will to bring real change. Its Achilles' heel is lack of an experienced cadre. Human capital first became an issue during government formation, when Borissov couldn't find a single, sufficiently untainted energy professional to take over what the PM hoped would be a newly-created Ministry of Energy. Instead, the colossal Ministry of Economy and Energy never underwent reform and now neither the economy nor energy get the attention they need. Borissov's shallow bench was further highlighted by the embarrassing, failed candidacy of Bulgarian EU Commissioner nominee Rumiana Jeleva. With Jeleva's badly damaged reputation preventing her return to her previous position as Foreign Minister, Borissov had no acceptable replacement except the well-regarded Minister of Defense Mladenov (see septel). With so few people to turn to, Borissov is taking on more and more himself. (We understand Borissov even toyed with the idea of naming himself Foreign Minister upon the first signs of trouble for Jeleva's EC nomination.) Outside the rule of law and defense portfolios, where, at least until now he has had a capable team in place, Borissov has turned into micro manager extraordinaire. His iron grip on Parliament combined with his centrality within the government have not only spread him thin and weakened hopes that the GERB party would develop into something more than a vehicle for its founder, but also have opened Borissov up to accusations that he is developing a Russian-style, authoritarian state. But so far such criticisms have resonated little with average Bulgarians, who still want their plain-talking, tough-guy Prime Minister to succeed. SUTTON
