BULGARIA/EU: EUROPEAN COMMISSION'S CRITICISM NO

C O N F I D E N T I A L SECTION 01 OF 02 SOFIA 000807

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/29/2017
TAGS: PGOV PREL ECON SOCI BU
SUBJECT: BULGARIA/EU: EUROPEAN COMMISSION'S CRITICISM NO
SURPRISE

REF: SOFIA 678

Classified By: Ambassador Beyrle for reasons 1.4 (b) and (d)


1. (C) SUMMARY: The European Commission's (EC) June 27
monitoring report, the first since Bulgaria joined the EU in
January, criticized Bulgaria's progress on fighting organized
crime and corruption, but stopped short of imposing safeguard
clauses. While acknowledging Bulgaria's progress, the EC
said it will continue to monitor the country in six areas in
the prosecution service and judicial system. The government
had largely anticipated the criticism, adopting a
speak-no-evil tone that labeled the report fair and objective
and reaffirming their commitment to continued reforms.
Privately, though, the government was said to be disappointed
that only three Commissioners (Bulgaria, Romania, and
Frattini) took a softer line. Continued EC monitoring will
keep the government focused, but the report is not likely to
provoke any additional personnel shake-ups. It will take a
more serious political commitment on the part of the
leadership to achieve genuine, lasting reform. END SUMMARY

MIXED PROGRESS ON CORRUPTION AND ORGANIZED CRIME


2. (SBU) The EC report, focused primarily on judicial reform
and fight against corruption, concluded that while Bulgaria
made some progress, more needed to be done on implementing
the reforms. The Commission chose not to impose safeguard
clauses on Bulgaria, but did propose continued monitoring in
six specific areas, setting out concrete benchmarks as
guidelines. According to the report, Bulgaria largely met
the first benchmark, removing any ambiguity on judicial
independence, but the Commission reserved its final judgment
until the judicial system law enters into force later this
year. Successful implementation of the law will determine
Bulgaria's progress on the second benchmark, ensuring a more
transparent and efficient judiciary. The EC criticized
Bulgaria for slow progress on enhancing professionalism and
accountability in the judicial system, the third benchmark,
pointing out that the judicial inspectorate envisioned in the
March constitutional amendments is yet to be set up.


3. (SBU) Heftier criticism was levied Bulgaria's fight
against corruption and organized crime. The EC judged
progress on high-level corruption, the fourth benchmark, as
insufficient, citing lack of rigorous and systematic
follow-up on allegations against politicians and government
officials. The key test here will be successful prosecution
and conviction of high-level officials involved in the recent
corruption scandals (reftel). The report acknowledged
Bulgaria's progress on cleaning up corruption in local
government and at the borders, the fifth benchmark, but urged
more prosecutions and deeper probes into inexplicable wealth
of officials. Similar remarks were levied against Bulgaria's
fight against organized crime, the final benchmark, where the
EC again pointed to lack of progress on the unresolved
contract killings.

NO SURPRISE FOR THE GOVERNMENT


4. (SBU) There were no surprises in the report's criticism,
nor in the government's reactions. Most high-level
officials, including President Parvanov, called the report
"balanced and objective" and saw the lack of safeguard
clauses as justified recognition of Bulgaria's progress. The
ruling-coalition partners united in their view that the
criticism was in the "tolerable boundaries," and the
opposition parties resisted the temptation to overplay the
continued strict monitoring. European Affairs Minister
Gergana Grancharova went a step further to say that
fulfilling the benchmarks will take serious political will.
Chief Prosecutor Velchev said the report contained several
mistakes -- it listed only five money laundering convictions
whereas the Prosecution Service reported twelve -- but
overall saw the EC's criticism as perfectly valid. Outgoing
Minister of Justice Georgi Petkanov, whose Ministry received
the lion's share of the criticism, stressed the fact that
Bulgaria successfully avoided safeguard clauses or financial
sanctions.


5. (C) Bulgarian officials echoed these we-had-it-coming
sentiments to us in private conversations. The Prime
Minister's foreign policy advisor admitted to us some
disappointment in the report, suggesting that Bulgaria had
done better in some areas, but acknowledged that contract
killings and poor judicial performance were sore spots. He
noted that private conversations with EC Commissioners had
hinted at giving Bulgaria a lighter touch, but in the end
only the Bulgarian and Romanian Commissioners and Frattini
had opted for that approach. Transparency International's
more positive report, released at the same time and showing
Bulgaria's year-on-year progress, was naturally more welcome

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in Sofia. The country's Prime Minister decided to take an
extremely low-key public stand, barely commenting on the EC
report. (Heading into weekend showdowns with his Bulgarian
Socialist Party and coalition partners to re-jigger
ministerial portfolios, the PM was obviously saving his fire
for the domestic political contest.)


6. (C) Interior Minister Petkov told Ambassador Beyrle on
June 29 that he thought the report's conclusions were
"useful," since only "pressure from the outside" would force
a change in Bulgaria's efforts to deal with crime and
corruption. Amb. Beyrle cited the Interior Ministry's
failure to make a single arrest in connection with a long
string of OC-related killings over the past two years, and
asked if the report might at least lead to the long-promised
replacement of General Valyo Tanev as head of the Ministry's
Organized Crime Directorate. Petkov said the change would
happen within a month.


7. (C) The Head of MOJ's Euro-integration Department said
the report's criticism was justified but remarked
sardonically that the new "verification mechanism" did not
differ much from the pre-accession monitoring regime. The
lead prosecutor on the closely-watched Toplofikatsia
corruption case said he agreed with EC's comments on the
judicial system but expressed doubt that change will come
quickly. True reform will come with "change of personnel,"
he said, referring to the conservative ranks in the higher
courts. Both agreed that continued monitoring from the EC
should keep the government focused on the necessary reforms.
Most media outlets carried extensive -- but not saturated --
coverage, avoiding excessive finger-pointing. The reactions
of the political parties were predictable, with Sofia Mayor
Borissov's GERB (the de facto center-right opposition)
lashing out against a culture of cozy corruption among the
established parties.


8. (C) COMMENT: The EC's exclusive focus on organized crime
and corruption will keep the government motivated on further
progress, but genuine reform will require significantly more
effort and political will. While Bulgaria is making efforts
to clean up low-level graft, the murky ties between
high-level politics and business interests still remain
largely untouched. There is definitely some progress -- the
fact that a powerful political player like Energy Minister
Ovcharov was removed from his position on corruption
allegations would have been unthinkable one year ago. But
more high-profile cases like this need to follow for the
changes to truly take root. In many ways, the EC (and many
EU embassies here) pulled punches on Bulgaria's rule of law
progress. The report has just enough force to keep the
government and political class focused, but insufficient
(thus far) muscle to compel more accelerated and targeted
action. The Prime Minister is intent on making progress --
more for the sake of Bulgarian citizens, he says, than as a
response to EU pressure -- but fractious partisan and
coalition politics have so far stymied his efforts to make
this fight the hallmark of his administration.
Beyrle