ZFR ONE YEAR AFTER ELECTIONS, STANISHEV EXCEEDING

S E C R E T SECTION 01 OF 03 SOFIA 000958 SIPDIS SIPDIS ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR E.O. 12958: DECL: 07/10/2016 TAGS: PREL MARR ECON PGOV IZ BG SUBJECT: ZFR ONE YEAR AFTER ELECTIONS, STANISHEV EXCEEDING EXPECTATIONS ZFR REF: SOFIA 926 SOFIA 00000958 001.2 OF 003 Classified By: CDA Jeffrey Levine, reasons 1.4(b) and (d). ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR MESSAGE SENT IN ERROR. PLS DISREGARD, REMOVE ALL COPIES AND BLANK THIS MRN. MESSAGE WILL BE RESENT AT ANOTHER TIME UNDER ANOTHER MRN. ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR LEVINE SOFIA 00000958 002 OF 003 total reimbursement of USD 48 for meals and incidental expenses in the first quarter of 2006. His personal wealth consists of an 1800 square-foot apartment where his mother lives and "a one-sixth share of a 1986 Mazda" left by his father. His income for 2005 was approximately BGN 20,000 (USD 13,000). Even his harshest critics do not question his personal integrity or his intelligence. Stanishev's knowledge of the EU accession process and its implications for Bulgaria is encyclopedic. This familiarity with European institutions and policymakers has given him credibility in Brussels, allowing him to push back when he felt the Commission was unfairly holding Bulgaria to a higher standard than the ten previous new members. Nor should Stanishev's political skills be underestimated. He has used the accession process to bind together his three-party coalition and push needed reforms through parliament. His decision to appoint as Finance Minister Plamen Orecharski, a technocrat closely associated with the opposition Union of Democratic Forces, took political courage and showed that he was capable of putting Bulgaria's interests above the interests of his party. -------------- AREAS FOR IMPROVEMENT -------------- ¶6. (C) Organized crime and political corruption are the government's Achilles heel. Faint progress has been made against either over the last ten months. Interior Minister Rumen Petkov is often blamed for this lack of progress, in our view deservedly -- his gaffe-prone performance and weak administrative skills mark him as a provincial leader who still looks out of his league at the national level. But the problems go deeper than any one individual. Political parties are dependent for financing on unregulated cash donations. Many of the richest people in the country -- and therefore the main patrons of political parties -- made their money through organized crime or misuse of public resources. Add to this a judicial system that is inefficient and subject to corruption, and you have an "iron triangle" of corruption, criminality and judicial inefficiency that is extremely difficult to break. Chief Prosecutor Boris Velchev, who began his seven-year term in February and is independent of the government, has shown signs that he is serious about tackling the problem (reftel). Velchev, however, has his work cut out for him and will need all the support he can get from the government. ¶7. (C) Interior Minister Petkov's apparent inability or unwillingness to reform his own agency and vigorously pursue major organized crime figures highlights another of PM Stanishev's problems: the perception that he is not fully in control of his cabinet. In fact, the Bulgarian constitution posits a consensus-based decision-making process within the Council of Ministers, making it difficult even for a strong personality to impose his or her will. Stanishev carries the additional burden of being a relative newcomer to high-stakes politics, having been plucked from near obscurity by former BSP leader Georgi Parvanov when Parvanov won the 2000 presidential election. In contrast, Petkov and Economy and Energy Minister Rumen Ovcharov -- both of whom at various times in the past were seen as coveting the premiership -- are experienced political operatives. Beyond his own party, Stanishev must also manage the competing personal and political interests of his coalition partners. -------------- COMMENT: WHAT THE FUTURE HOLDS -------------- ¶9. (C) If we could choose the face of Bulgaria's future political leadership that would best serve U.S. interests, Sergei Stanishev would be at or near the top of the list. In spite of the burdens placed on him by his own party and a political system that seemingly can be changed only at glacial speed, Stanishev has shown himself to be a capable leader and a dedicated reformer. He has successfully kept his government focused on its top priority of early membership in the European Union, with all of the complex internal changes that goal entails. Once this is achieved, Stanishev will have more time to devote to building his government's domestic legacy. This is likely to include addressing major social issues such as education and health care, both of which are in or near crises. He will also have to work harder to keep his coalition together after the "glue" of EU accession starts to weaken. Yet the coalition is probably stable in the medium term, if for no other reason than that the two junior partners have nowhere else to go SOFIA 00000958 003 OF 003 right now. In short, further USG investment in Stanishev will likely pay dividends for some time to come. His government represents stability and continuity in foreign policy, and he personally represents the young, reform-minded Bulgarian politician of the future. To the extent we are able support him and other like him, U.S. interests in Bulgaria will be strengthened. Levine