Assessing Accession

Economic News

22 Jul 2010
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Fears have been growing in Sofia this week that the European Commission's latest report on Bulgaria may turn out to be overly critical of the country's attempts to prepare itself for accession to the EU in 2007.

Yet the significance of this report, due out on October 25, has been reduced dramatically since the European Commission (EC) decided not to include its final recommendation on whether to delay Bulgarian membership by a year.

That final analysis will now be contained in the April 2006 report, ostensibly to take into account the difficulties faced by Bulgaria over the summer, when widespread flooding and general elections slowed the political process.

Nonetheless, next week's report will be a good indicator of Bulgaria's standing in the eyes of the EC, and will contain a roadmap for what is left to be done to fulfil all the membership criteria. Many EU member states are also waiting for the October report before beginning the process of ratifying Bulgaria's EU Accession Treaty.

EC officials remain tight-lipped about the exact contents of the report, but it is clear that the commission retains concerns about the pace of reform in the Balkan country. While the Bulgarian parliament passed a raft of new legislation in recent months in order to comply with EU regulations on everything from consumer protection to environmental standards, progress on judicial reform and the fight against corruption and organised crime remains slow.

On a visit to Sofia at the end of September, EU Commissioner Olli Rehn expressed concern that as yet there have been no corruption trials involving high-ranking public officials.

Reform of the judiciary and its implementation is the priority of priorities, Rehn told a press conference at the end of his fact-finding tour. Petty corruption has been reduced over the years, but very few high-level corruption cases have been prosecuted. "Nobody should be above the law," he added. "This is a matter of credibility of the judicial system."

However, Rehn also reportedly told Prime Minister Sergei Stanishev that he believed all outstanding tasks could be completed in time and that Bulgaria had already met the economic criteria.

Those optimistic about Bulgaria's 2007 accession date have taken heart from the EC's decision to delay by six months its final recommendation about Bulgaria's readiness for a 2007 entry. Clearly, if the EC wanted to delay the country's accession, it would have stuck to its original October deadline. Nonetheless, this delay is also understood to be part of a final carrot and stick approach to encourage Bulgaria, and its pre-accession neighbour Romania, to speed up essential reforms. Many therefore expect stern words in the October report, but the country will have six more months to heed them.

Another reason for optimism is the growing list of EU member states that have pledged to ratify Bulgaria's accession treaty despite the outcome of next week's report. Significantly, Italy, one of the EU's founding members, has pledged to ratify the treaty in the next few weeks, along with Greece, Denmark, Luxembourg and a number of recent entrants from the Baltic states and Central Europe. Hungary has already ratified the treaty.

Nonetheless, some opposition to Bulgaria and Romania's 2007 accession remains. Bulgarian Foreign Minister Ivailo Kalfin, after a meeting with EU ambassadors in Sofia, warned that some EU countries might object to a 2007 accession date, although he declined to comment on which those might be. Germany, however, has yet to begin the ratification process, and the new conservative chancellor, Angela Merkel, is understood to have reservations.

According to Member of the European Parliament (MEP) Graham Watson, leader of the Alliance Liberals and Democrats in Europe, who was in Bulgaria last week to show his support for the country's chances, some right-wing MEPs are also sceptical and would like to see the safeguard clause invoked, delaying membership for Bulgaria and Romania by a year.

In Bulgaria itself, debate about the effect of a delay remains muted. With all three parties and some two thirds of the public, according to most polls, committed to EU entry, it is politically unwise to question the country's readiness. Yet privately many businessmen, analysts and even politicians have told OBG that a delay could actually benefit Bulgaria in the long run.

Despite the initial disappointment it would cause, said one prominent businessman on condition of anonymity, a delay would actually allow implementation of EU-friendly laws to catch up with the pace of legislation. This applies not only to the courts, but also to businesses, which would have an extra year over which to spread the investment needed to meet new regulations. Of course, he continued, it might also benefit the country as whole in that extra funds could be sent Bulgaria's way to help the country meet its commitments and targets.

For now, such pragmatic voices can wait to see what the spring brings. The government, however, will find out next week just how much more it has to do to take its place in the EU club.

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