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FM AMEMBASSY SOFIA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6656
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 SOFIA 000047 
 
SIPDIS 
 
E.O. 12958: DECL: 01/18/2020 
TAGS: PREL PGOV ECON ENRG BU
SUBJECT: BULGARIA:  THE BORISSOV GOVERNMENT AT SIX MONTHS 
 
Classified By: CDA Susan Sutton for reasons 1.4 (b) and (d). 
 
¶1.  (C)  Summary:  Nearly six months in office, Prime 
Minister Boyko Borissov's government has started to make good 
on its promises on rule of law and the economy, winning kudos 
(and funds) from the European Commission in the process. 
Although it appears to be backtracking on its initial 
anti-Russian bluster on energy, the government has otherwise 
pursued a forward-looking, trans-atlantic agenda, including 
probable acceptance of a Guantanamo detainee, increased 
support for Afghanistan, and eager interest in hosting 
missile defense assets on Bulgarian soil.  Five seats short 
of a majority in Parliament, Borissov has managed his 
"floating majority" with a deft hand, while exacting strict 
party discipline from his GERB MPs.  With no real opposition 
to worry about, the biggest challenge Borissov has faced is a 
lack of an experienced and qualified cadre. End Summary. 
 
 
¶2.  (C) Former bodyguard and Sofia mayor Boyko Borissov took 
power July 27, 2009, with a promise to clean up endemic 
organized crime and corruption, eliminate the culture of 
impunity within which previous governments and connected 
business interests operated, and restore Bulgaria's 
reputation within the EU.  On rule of law, the government has 
started to deliver the goods.  It is investigating possible 
criminal activity of seven former ministers, two of whom have 
been formally charged.  It passed legislation to reform the 
Ministry of Interior and the State Security Services (DANS) 
to eliminate overlapping roles and improve interagency 
cooperation.  It established interagency organized crime task 
forces and implemented new measures against money laundering. 
 The government's initial, dramatic moves on corruption and 
organized crime, and its success in breaking up two large and 
infamous organized crime rings (one involving kidnapping and 
another auto theft) has kept Borissov's public approval 
rating high.  The government's efforts have won kudos from 
the EU, which has unfrozen nearly USD 300 million in 
pre-accession funds partially as a result. 
 
¶3.  (C)  It is the economy that required even more of the 
government's attention in its first six months.  Inheriting 
what it described as an 11 percent budget deficit after a 
spending-spree by the out-going Socialist-led government, new 
Deputy Prime Minister and Finance Minister (and former World 
Bank executive) Simeon Dyankov immediately set about putting 
the fiscal house in order.  It hasn't been easy or pain free. 
 Dyankov suspended payments on most government contracts, and 
subsequently slashed public administration and defense 
spending in his near-balanced 2010 budget.  Bulgaria's 
unemployment rate has increased from 6.3 percent in December 
2008 to 9.1 percent in December 2009, and is projected to hit 
11.4 percent in 2010.  On the bright side, Bulgaria has 
managed to avoid IMF assistance, and will probably be the 
only EU country to meet the Maastricht criteria in 2010. 
 
¶4.  (C)  Borissov has kept his Trans-Atlantic orientation and 
empowered the most pro-U.S. members of his cabinet (including 
Deputy Ministers Tsvetanov and Dyankov and Defense Minister 
Mladenov, whom the PM tapped January 20 to take over as 
Foreign Minister).  Despite very tight budgets, he has 
increased Bulgarian deployments to Afghanistan and made 
investments in the U.S.-Bulgaria joint training facilities. 
Bulgaria has taken a strongly supportive stance on U.S. 
Missile Defense plans in the region, and has offered to host 
M.D. assets.  When asked to consider accepting a Guantanamo 
detainee, the Prime Minister and Minister of Interior 
Tsvetanov moved quickly to make it happen, expending 
political capital to gain the support of opposition parties. 
(Formal approval by the Council of Ministers on Bulgaria's 
acceptance of a detainee is expected in January.) 
 
¶5.  (C)  On energy Borissov has shown less resolve.  After 
promising a complete review of each large energy project to 
which the last, Moscow-friendly government entered into with 
Russia, it appears all of these projects still have some life 
left in them.  The Bulgarians are proceeding with South 
Stream (but trying to get the best deal possible at each 
stage), while the Burgas-Alexandroupolis oil pipeline is in a 
holding pattern.  On the Belene Nuclear Power Plant, which 
has become synonymous with non-transparency and graft, we are 
hearing disturbing rumors that -- seeing no way to get out of 
the project and with no means to finance it -- the government 
is considering giving a stake of the project to their Russian 
partners. 
 
 
SOFIA 00000047  002 OF 002 
 
 
 
MANAGING A "FLOATING MAJORING" AND A TOOTHLESS OPPOSITION 
--------------------------------------------- ------------ 
 
 
¶6.  (C) Domestic analysts widely viewed Borissov's decision 
last July to form a minority government as an irresponsible 
gamble.  Now most agree it was a stroke of genius.  GERB's 
MPs are young and inexperienced, but they show absolute party 
discipline and loyalty.  Our contacts confirm they are 
improving over time.  Borissov continues to depend on the 
reliable support of the ultra-right party Ataka and the 
center-right Blue Coalition to garner the additional five 
votes he needs in Parliament.  Relations with the third party 
in Borissov's "floating majority" -- the center-right Order, 
Law and Justice -- have disintegrated, but with little 
consequence for GERB's ability to get things done in 
Parliament. 
 
¶7.  (C) The real opposition in Parliament, the Bulgarian 
Socialist Party (BSP) and the ethnic Turkish party Movement 
for Rights and Freedoms (MRF) are in internal disarray after 
their stinging electoral defeat in July.  Focused on internal 
power struggles and rebuilding, they represent little 
resistance to GERB initiatives.  Into this void stepped 
President Georgi Parvanov, the BSP's former head, who has 
openly and personally criticized Borissov for his handling of 
the economy and energy policy, and refused for some time to 
approve the government's sought recall of its ambassadors to 
the United States and Turkey.  The Borissov-Parvanov rift has 
healed somewhat in recent weeks just as Borissov has warmed 
up to certain of Parvanov's pet energy projects with Russia. 
 
COMMENT 
-------- 
 
¶8.  (C) This government has shown the political will to bring 
real change.  Its Achilles' heel is lack of an experienced 
cadre.  Human capital first became an issue during government 
formation, when Borissov couldn't find a single, sufficiently 
untainted energy professional to take over what the PM hoped 
would be a newly-created Ministry of Energy.  Instead, the 
colossal Ministry of Economy and Energy never underwent 
reform and now neither the economy nor energy get the 
attention they need.  Borissov's shallow bench was further 
highlighted by the embarrassing, failed candidacy of 
Bulgarian EU Commissioner nominee Rumiana Jeleva.  With 
Jeleva's badly damaged reputation preventing her return to 
her previous position as Foreign Minister, Borissov had no 
acceptable replacement except the well-regarded Minister of 
Defense Mladenov (see septel).  With so few people to turn 
to, Borissov is taking on more and more himself.  (We 
understand Borissov even toyed with the idea of naming 
himself Foreign Minister upon the first signs of trouble for 
Jeleva's EC nomination.) Outside the rule of law and defense 
portfolios, where, at least until now he has had a capable 
team in place, Borissov has turned into micro manager 
extraordinaire.  His iron grip on Parliament combined with 
his centrality within the government have not only spread him 
thin and weakened hopes that the GERB party would develop 
into something more than a vehicle for its founder, but also 
have opened Borissov up to accusations that he is developing 
a Russian-style, authoritarian state.  But so far such 
criticisms have resonated little with average Bulgarians, who 
still want their plain-talking, tough-guy Prime Minister to 
succeed. 
SUTTON