BULGARIA HOLDS THE LINE ON ARMS LICENSES

S E C R E T SOFIA 000361

SIPDIS

SIPDIS
NOFORN

DEPT. FOR EUR/NCE, EUR/RPM, EUR/PRA, ISN, PM

E.O. 12958: DECL: 03/16/2017
TAGS: PARM PREL ETTC RS BU
SUBJECT: BULGARIA HOLDS THE LINE ON ARMS LICENSES

REF: A. STATE 25152

B. SOFIA 177

C. KARAGIANNIS-KOSTELANCIK EMAIL (3/16/07)

Classified By: CDA Alex Karagiannis, for reasons 1.4 (b) and (d).


1. (C/NF) On March 16 DCM discussed the state of BG-RU
negotiations on the arms licensing issue with Valentin
Radomirski, chief foreign policy advisor to PM Stanishev.
Reftel A points were delivered to MFA, MOD, and Ministry of
Economy and Energy on March 1 and had been previously
conveyed to Radomirski by GoB officials (no non paper was
left).


2. (S/NF) Radomirski thanked us for our comments, saying that
they helped solidify Bulgaria's negotiating position. He
hinted that some GoB figures had favored further concessions
to Russia, referring to the "danger" in such negotiations
that "some would try to be more friendly (to Russia) in order
to prove their worth." In Radomirski's words, our clear and
timely expression of U.S. policy gave government leaders the
ammunition they needed to reign in wayward voices in the
administration and refocus on a team approach.


3. (S/NF) The Bulgarian government's fundamental position has
not changed since reported in reftel B -- the GoB is
proposing direct governmental talks on licenses to be used by
the Bulgarian armed forces, while commercial licenses are to
be negotiated directly between Bulgarian producers and
Russian firms. Radomirski reiterated that Bulgaria "cannot
allow" a so-called permissive regime, under which Russia
would maintain a veto over certain Bulgarian exports, or
Bulgaria would agree to a "black list" of banned countries.
The next step in the arms license negotiations is a planned
April 23-24 session of the Bulgarian-Russian
Military-Technical Cooperation working group. Assuming this
meeting goes well, Radomirski said, PM Stanishev may visit
Moscow on May 7-8.


4. (S/NF) Political pressure from Russia remains high,
according to Radomirski. He claimed that President Putin
raised the issue in his March 15 meeting with Bulgarian PM
Stanishev while in Greece for the Burgas-Alexandroupolis
pipeline signing ceremony. Radomirski described Putin as
exceptionally harsh on Georgia, claiming that Tbilisi was
"preparing for war" and obliquely threatening to recognize
Abkhazia. Even as the Russians pressure them to cut off
sales to Georgia, commercial ties are pulling Bulgaria in the
opposite direction: Radomirski informed us that leading
Bulgarian defense manufacturer Arsenal has recently received
an order from the Georgian Ministry of Defense valued at
$150m (NOTE: By comparison, Bulgaria's total defense exports
for 2006 totaled approx. $100m).


5. (S/NF) Frankly discussing the government's attempt to
balance these competing interests, Radomirski said he had
asked Arsenal Managing Director Ibushev to stall the
Georgians ("tell them we have all new procedures because of
the EU..") in order to avoid sabotaging ongoing negotiations
with Russia. However, according to Radomirski, Georgia has
still not paid for a large order it placed last year with
Bulgarian firm Arcus for its Ministry of Interior, which
Bulgaria approved despite intense Russian pressure.

Comment:
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6. (S/NF) As a technocratic, centrist-leaning Socialist, PM
Stanishev is subject to criticism from hard-liners within his
own party for "sacrificing traditional ties with Russia" as
Bulgaria lines up with NATO and the EU. The Russians
understand that a Moscow trip would be a political plum for
Stanishev and have accordingly made a visit contingent on a
successful resolution of the arms licensing issue. However
tempting a visit might be, the PM's office has shown
impressive leadership on this issue, corralling diverse
corporate and political factions behind a moderate approach
based on a clear-eyed view of Russia and an understanding of
Bulgaria's national interest that is grounded in
trans-Atlantic values.

BEYRLE