сряда, 18 октомври 2017 г.

Bulgaria Analytica: Why Putin’s Russia is a direct existential threat to Bulgaria – part two

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The Eurozone effect

Bulgaria’s entry into NATO is not a betrayal to Russia, but its continued membership is
Alexander Dugin
Intellectual guru of Russia’s Euro-Asian doctrine

Let’s consider the reference to the Russian threat when achieving the other key goal of Bulgarian foreign and monetary policy – membership in the Eurozone.
The metrics of the accession-ready status are not just embodied in a set of formal criteria but reflect a generic reference to key system indicators, including the resilience of the economy to external shocks, the ability to sustain high growth and wealth generation rates; capability of institutions to provide efficient governance, mitigate risks and stick to obligations; and capacity of citizens to profit from rights, opportunities and cope with the challenges of “life in the eurozone”.
Most of the identified barriers on the accession track are not pre-ordained, nor is Bulgaria permanently fixed at the EU’s bottom by inherited levels of living standards and welfare. There are growing concerns among the EZ members and the ECB with the quality of the country’s interface with the EU monetary and financial networks. Despite EU funds and the boon of the larger EU market, Bulgaria is not catching up fast enough. For whatever achievements the country can boast of, it is still unable after 10 years of membership in the EU to shorten the distance to the EU averages. The trends are not inspiring optimism. The country lags most of its neighbors, even non-EU members, in base income levels, including minimum pay and pensions.
Although GDP growth levels are relatively high at 3-4% per annum, this is hardly enough to catch up with the rest of the EU, moreover that neighboring countries record a higher growth (Romania – 5,5 %, Slovenia – 4,8%) and Foreign Direct Investments (record drop of 55%) levels. Worst of all, there is no commensurate income growth to follow suit, with dramatic differentials widening between the capital city Sofia and the countryside. Ceteris paribus, this decries a system error emanating from an ineffective and corruption-motivated redistribution mechanism that foretells future fiscal and monetary problems, growth unsustainability and gaps in social cohesion over the long-term.
At the ECB and EC level – the EU’s power centers – Bulgaria seems stuck with the wrong model, unable to break with the past. EZ members easily translate such concerns into lack of enthusiasm for Bulgaria’s membership. This might seem unjustified for some, with overplayed fears of collateral risks, associated with unreformed economic and institutional risks, in the aspiring states spreading to the zone. The EZ decision-makers are reluctant to expect that Bulgaria catches up with Austria, or even Slovenia. What most anticipate is that the country proves capacity to identify and cope with its own problems, to bung the leaks from which the nation’s individual and collective riches evade. Which is not a fact.
The matrix of the “Russian” model in Bulgaria generates Russian-type inequalities – the state-corporate oligarchy is getting richer and the poor become poorer. The Russian state corporate governance matrix generates higher internal and external risks, looming social tension and major hiccups in economic development. The oligarchy, that exemplifies the model, is neither technologically innovative, nor creative or productive. It excels in one ‘art’ – the ability to redistribute already generated, by someone else, wealth and seize, often with state support, well performing assets. Once in the EZ, Bulgaria’s problems are bound to become common and the bill will be paid by the taxpayers of all member states.
The proximity and the induced gravity of the Russian Eurasian model by default is an imminent risk and a threat to any eurozone member. Acknowledgement of this risk and its timely mitigation are therefore an essential prerequisite to accession to the Euro area.
One can argue and indulge in refined nuancing of the nature of the Russian threat, but the core line is clear – it is direct, immediate, systematic, both generic and specific. There should not be any illusion – Russia openly challenges and undermines the key anchor of modern Bulgarian politics – Euro-Atlantic membership, on which hangs the national security and welfare paradigm. It slowly but irreversibly constrains the Kremlin’s ability to charge and collect its imperial rent from Bulgaria – which is what geopolitical shifts are all about. Russia believes the Soviet time taxes – payments from countries in the spheres of influence are naturally due. Their overall estimate, on an annual base, are in the range between $5 and $10 billion dollars – factoring in overpriced exports, abuse of monopoly status, transfer pricing, corruption charged contracts and illegal capital transfer, including money laundering and megalomaniac projects.
Even in tourism, where Russia professes to contribute most to the Bulgarian GDP, ever greater parts of the value chain come under control of Russian business – travel agencies and tourist service brokerage, charter flights, hotel development and related services. Whereas the total number of Russian tourists remains roughly unchanged over the last 10 years, the share of revenues generated in the sector by them that remain in Russian controlled business has risen above unparalleled by any other country 30%, well above the 24% of GDP referred in the “Kremlin playbook” as a critical threshold for Russia’s influence.
The Russian threat could be discerned as well on the geopolitical and military plane – suffice to note the scale of militarization of Russia’s Black sea fleet and Crimea, the missiles with near 3000 km range and their targets – all meant to impress, scare and subdue into obedience. Although Russia is talking defense – the scale of the military build-up and the Crimea, Eastern Ukraine and Syria operations unequivocally lead to offensive intent interpretations. In military planning there is no second guessing. Moreover, when it comes to building adequate defense and response capabilities, judged against this background, the statements made by Bulgaria’s defense minister and President Radev – the Commander in chief – that Russia is no threat generate nervousness and could potentially lead to second guessing in politicians and military planners, both inside the country and abroad.
The Bulgarian institutions are the most vulnerable in the EU and NATO to exogenous, including Russian, threats directly reverberating on the quality of public governance and perception. What any given unit of Russian direct influencing in average EU and NATO member country could provoke as common cold or fever, ends up as pneumonia in Bulgaria.
A clear proof is the visit of Russian General Prosecutor Chaika to Bulgaria and the commitments made by the Bulgarian side to coach prosecutors at the Russian Prosecutor General’s Academy on topics ranging from human rights to the fight against corruption. This part of the bilateral agreements was kept away from the public in Sofia. Its disclosure points in no uncertain terms to the mentality and the strong dedication of the Bulgarian Chief Prosecutor’s office – bearing in mind the harsh criticism by the EC and other EU institutions and the abysmal track record of the Russian authorities in those two areas – human rights and anti-corruption.
The EU integration vector runs in the opposite direction to the one taken by the most influential wing in the Bulgarian Judicial System – the prosecutor’s office. Instead of aligning its value set and practices with the EU, Sofia has opted to engage in activities with the Russian prosecutor’s office – which blocks progress on the EU integration track, not only of the judiciary but of Bulgaria as a whole. Unless one tends to think that Russia is a role model for human rights and the anti-corruption fight, the only explanation left is institutional capture.
One can criticize or approve of Vladimir Putin’s regime, but there is a firm and unequivocal shared view from both the EU and NATO – he is an autocrat and a threat. The more intense and in-depth Bulgaria’s political relations are with the Russia, against a backdrop of a misbalanced and unequitable bilateral trade and economic structure, the greater the chance for a negative spillover effect from the Kremlin’s internal and foreign policies, including from possible and pending turmoil.
Moreover, the Bulgarian Prosecutor’s Office is meant by the constitution to be the guardian of the country’s sovereignty and integrity, having a duty to shield it against external threats, including from Russia.

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