US embassy cable - 05SOFIA780

UNCLAS  SOFIA 000780 
 
SIPDIS 
 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, ECON, SOCI, BU 
SUBJECT: BULGARIA SIGNS EU ACCESSSION TREATY, BUT MUCH WORK 
REMAINS 
 
SENSITIVE 
 
1. (SBU) SUMMARY:  Bulgaria signed the EU Accession Treaty 
on April 25 paving the way to join the Union on January 1, 
 
 
2007.  The Bulgarian government plans immediate submittal of 
the treaty to Parliament for ratification prior to the late 
May election recess.  Despite Bulgaria's solid progress and 
early completion of negotiations, the EU continues to 
emphasize its problems in the areas of rule of law, 
corruption and organized crime.  The Commission will likely 
be watching Bulgaria closely and has reserved the right to 
delay entry if its accession commitments are not met.  There 
is strong domestic political consensus, however, on 
Bulgaria's EU accession, and political parties have agreed 
to push forward necessary reforms.  The only point of 
contention on the Bulgarian side remains Bulgaria's 
unpopular commitment to a portion of the Kozloduy Nuclear 
Power Plant as a condition of entry.  END SUMMARY. 
 
EU ACCESSION TREATY SIGNED IN LUXEMBOURG: WHAT'S NEXT? 
 
2. (SBU) Following the assent of the European Commission, 
Bulgaria signed the EU Accession Treaty on April 25, 2005, 
in Luxembourg.  Prime Minister Simeon Saxe-Coburg Gotha, 
President Georgi Purvanov and the Foreign Affairs and 
European Affairs Ministers all signed the Treaty, which 
provides for accession on January 1, 2007, and sets out the 
terms and conditions of Bulgaria's membership.  PM Saxe- 
Coburg hopes the landmark event will boost the ruling 
party's chances in the June general elections, for which 
polls show the ex-king's party trailing the opposition 
Socialists. 
 
3.  (SBU) Bulgaria and the current EU states must ratify the 
treaty before January 1, 2007.  The Bulgarian Parliament has 
said it will do so before the June general elections.  This 
self-imposed deadline is for domestic political purposes 
only, although it could help kick off the process for other 
Member States.  While some EU member countries -- Luxembourg 
and Cyprus -- have declared their intention to ratify the 
Treaty as soon as it is signed, the entire process could 
take up to a year.  The government has talked about holding 
a referendum in Bulgaria on the country's EU accession, but 
disagreements regarding the timing of a referendum have so 
far blocked any decision. 
 
CHALLENGES AHEAD, BUT ACCESSION DELAY SEEMS UNLIKELY 
 
4.  (SBU) The underlying work needed for Bulgaria's 
accession in 2007 is not yet complete.  The EU has 
identified the lack of judicial reform as the greatest 
threat to successful accession, saying that the Bulgarian 
government must make solid efforts to reform the judiciary 
and step up the fight against corruption and organized 
crime.  In view of this shortcoming, the government's top 
priority is the approval of a new Penal Procedure Code that 
will increase the effectiveness of criminal investigations, 
clarify the pre-trial phase and speed up penal procedures. 
This is unlikely to occur before Parliament dissolves in 
late May for the general elections.  However, this and other 
laws related to EU accession will top the agenda of the next 
Parliament, which must act in time for the November 
Comprehensive Monitoring Report. 
 
5.  (SBU) If Bulgaria does not fulfill its accession 
commitments, the Commission may invoke the safeguard clauses 
provided for in the Treaty.  If accepted unanimously by the 
Council, this could delay accession by one year.  Despite EC 
and Member State officials' threats to invoke the safeguard 
clause if conditions are not met, there is no indication at 
this point that Bulgaria's accession is in danger of delay. 
 
6.  (SBU) To ensure compliance with accession commitments, 
the Commission has started an intensive, rolling monitoring 
exercise through peer reviews and committees.  This should 
culminate in the Comprehensive Monitoring Report, to be 
issued by the Commission on November 9th.  The report will 
assess progress made up to September 30 this year and 
highlight remaining shortcomings, if any.  The European 
Parliament has reserved the right to participate in the 
monitoring process. 
 
7.  (SBU) While publicly fairly confident Bulgaria will 
enter as scheduled, Meglena Kuneva, Minister for European 
Affairs, privately told us she is concerned outside factors 
could affect Bulgaria's chances.  First is overall 
enlargement fatigue, which is growing within the EU, 
especially in Germany.  Second is the unspoken understanding 
within many EU states that neither Bulgaria nor Romania are 
especially desirable countries, coming with economic and 
structural problems that will burden the EU for many years. 
Third, delaying Bulgaria's (and Romania's) entrance would 
send a very effective message to Croatia and Turkey that the 
EU is serious about maintaining its standards.  Finally, 
 
 
Bulgarian officials also fear the EU might link their entry 
to Romania's, and any delay of reforms north of the Danube 
would also prejudice Bulgaria's entry. 
 
ADVANTAGES AND DISADVANTAGES TO BULGARIA 
 
8.  (SBU) Bulgarian officials maintain that strengthening 
the rule of law, joining a bigger and more integrated 
market, improving the regulatory environment, and removing 
trade barriers will contribute to economic growth and spur 
greater foreign investment.  An open border with Greece will 
be one of the most visible, immediate benefits.  Another 
boon for Bulgaria will be the EU's financial assistance. 
Bulgaria will receive much more money from the EU budget 
than it will pay: 4.5 billion euros between 2007 through 
2009, while its annual contribution to the EU is estimated 
at 300,000 euros for the same period. 
 
9.  (SBU) On the economic front Bulgarian companies are 
unlikely to withstand competition from Western European 
firms.  Bulgarian business representatives voice concerns 
over the EU's "impossible-to-meet" standards and 
requirements.  In particular, meeting environmental 
standards could prove daunting.  Equally important, local 
farmers will be hurt by the EU's agricultural policy. 
Another negative effect associated with the EU accession is 
the possibility of ever-greater inflation of already-rising 
real estate prices as richer EU citizens push up demand for 
properties in Bulgaria.  Regardless of EU membership, 
experts project Bulgaria will continue to experience 
demographic problems: decreasing birth rate, growing 
mortality rate, economic migration, and shortage of quality 
labor. 
 
PUBLIC FAVORS EU ACCESSION 
 
10.  (SBU) Bulgarian opinion about the EU is predominantly 
positive, in part due to Minister Kuneva's six month EU- 
Accession campaign in small cities and towns, but is 
expected to slump a bit as citizens become more aware of 
membership obligations.  The April survey conducted by the 
International Republican Institute indicates 76 percent are 
in favor of Bulgaria's EU membership. A survey conducted by 
the parliamentary National Center for the Survey of Public 
Opinion shows that 61 percent believe EU membership will 
help Bulgaria improve its standard of living. 
 
11.  (SBU) The survey also finds unrealistic expectations: 
--SALARIES:  36 percent believe salaries will increase 
substantially after Bulgaria joins the EU.  One in two 
Bulgarians expect that the minimum monthly salary will 
quickly exceed 250 euro, from the current 77 euro level. 
--PENSIONS:  34 percent expect higher pensions; 
--UNEMPLOYMENT:  38 percent say unemployment will drop, 
while six in 10 are confident they will not have to leave 
Bulgaria to work in another EU country after 2007. 
 
12.  (SBU) The survey also shows that Bulgarians have only 
limited knowledge of the EU and Bulgaria's accession 
obligations.  Forty-seven percent don't know whether 
Bulgaria has completed EU negotiations and 75 percent are 
not familiar with EU obligations. 
 
13.  (SBU) On the negative side, ordinary Bulgarians are 
upset about the forced closure of Kozloduy Nuclear Power 
Plant as a condition of entry.  Bulgarians see Kozloduy as a 
sign of the country's technological prowess.  In addition, 
the plant employs a large number of people in one of the 
most depressed areas of the country.  The issue is being 
used as a political football in the current election season, 
and it is far from clear whether Bulgaria could be 
successful in reversing this decision. 
 
14.  (SBU) COMMENT:  Acceding to the EU on January 1, 2007, 
is Bulgaria's top foreign policy objective.  Despite the 
seriousness of the outstanding rule of law issues, it is 
unlikely the EU will delay Bulgaria's accession.  Bulgarian 
political parties have teamed up to push forward reforms and 
implement accession commitments.  The government of PM Saxe- 
Coburg Gotha capitalized on the date for signing the treaty 
just two months ahead of the general elections in order to 
boost its election profile and ride the positive public 
opinion about the EU.  Leading members of his party are 
holding celebrations of the signing in their election 
districts today.  Average Bulgarians may be over-optimistic 
about what the EU can do for them, but it is clear that 
despite the many problems that remain here, the country is 
heading in the right direction -- in large part due to the 
EU Accession process. END COMMENT.