The Recovery and Resilience Plan - where does Bulgaria currently stand?

Then a newspaper leaked the returned comments of the European Commission on the submitted plan. In the words of a former MP "the energy part has been minced".

So how far along are we on the road towards the 6 billion euro?

Energy, which is the most problematic part of the plan (and by coincidence - of the Bulgarian economy), has indeed been criticized thoroughly. There is still a lot of work and important issues that need to be resolved by the regular government. Another area that has literally been returned for rewriting is transportation.

Yet the process is moving, and Bulgaria has made significant strides, which simply could not have happened with GERB - in the justice sphere, for example, a major obstacle such as the untouchability of the prosecutor general is almost resolved. A caretaker government couldn't have solved things that have been log jammed for years - for example, energy reform or the lack of any plan for transport issues.

Issue 1: What to do with the coal

One of the main goals of the recovery plans set by the EC was to help both economic growth and the goals of the Green Deal. That is why, as a precondition for the release of money, there is a requirement to achieve specific climate commitments, most often related to the banning of coal.

However, as this topic is sensitive for Bulgaria, such measures are included in our plan quite ornately.

"The proposed decarbonization measures lack firm commitments, as they are included in the plan as non-binding considerations for future work. The plan should include clearer commitments on decarbonization of the energy sector, transposed into clear stages and objectives," the critique of the EC says. To put it in their own words: "The deadline for removing coal is not ambitious enough."

Formally, Bulgaria has said that it will shelve coal by 2038, but Brussels elegantly tells us that all our neighbors will do so much earlier. And they point out that the included project for a new gas thermal power plant is not quite efficient.

On the one hand, in order to approve the construction of such a capacity (1 gW), it is necessary to ensure the closure of a much larger coal capacity. According to the Bulgarian plan, the shutdown of 1.4 GW of coal installations is envisaged, but the EC believes that it should cover at least 1.6 GW. And not just any capacity, but the most polluting ones - which in this case, in addition to the state TPP "Maritsa East 2", are related to Hristo Kovachki TPP "Bobov Dol", "Brickel" and TPP "Maritsa 3" in Dimitrovgrad.

In short, the condition is that shut down capacity is responsible for at least 40% of the greenhouse gases in the Bulgarian energy sector. Last but not least, it is said that the planned financing for the future gas thermal power plant does not seem quite realistic - Bulgaria has pledged 1.66 billion levs (498.7 million from the plan, a matching amount from the Just Transition Fund and, in the form of a financial instrument, another 663 million levs).

Moreover, there are serious criticisms of the idea of building gas infrastructure in the Maritza-East complex, which will be used for hydrogen in the future. In order for the EC to accept this project, there must be a commitment that after a certain period it will be used only for green hydrogen, so it is necessary to be clear where the fuel in question will be provided.

There are a bunch of questions about other projects, including the one to encourage new investments in solar power plants with storage batteries.

But most important is the statement that funds from the plan cannot be used to cross-finance companies in the group of the Bulgarian Energy Holding (BEH) - currently the holding financially supports TPP "Maritsa East 2" and "Sofia District Heating".

Issue 2: The untouchable and other judicial problems

A lot of attention was focused on judicial reforms. The EC has asked Bulgaria to finally resolve the practical infeasibility of the prosecutor-general being investigated (as it has to be done by his own subordinates).

The Cabinet proposed a decision - the investigation of the chief and his deputies to be carried out by prosecutors and investigators in high positions in the Supreme Cassation Prosecutor's Office or the National Investigation Service, to be determined ad hoc on a random basis for each case. Various guarantees of the investigator's independence were provided, including the possibility of free career development after the trial, of appointing the person as a judge, a ban on disciplinary proceedings against the investigating Attorney General during the trial, and beyond.

Here the EC has several remarks, notably that this process and mechanism are not described in detail. It insists on additional procedural guarantees for "independent selection and appointment", minimizing the role of the SJC only to the assessment of limited objective criteria, providing for an independent audit of the software and explicitly extending the investigator's immunity until the end of the mandate of the Attorney General and his deputies, who are under investigation, and not just until the end of the trial.

But, despite the criticism, it is clear that the conversation has reached a level where it can be continued constructively with the new cabinet. The EC's main insistence is that a time should be specified for this to happen. The plan envisages it by mid-2023, but the EC insists "given the importance of this reform, to move it to an earlier schedule if it is to be considered splitting into two stages, given that some of the reforms can also be done faster ".

As early as December 10, the Ministry of Justice announced that the EC's comments were technical and editorial in nature. The Ministry agrees with the comments of the European Commission and informs that most of them have been accepted, reflected in the relevant documents and sent to the Council of Ministers on Friday.

Issue 3: Transport chaos

Outside of energy, perhaps the most significant criticisms concern the transport part of the plan. The EC seems to have finally dropped the rose-tinted glasses it has donned to monitor Bulgarian transport in recent years and is pushing for "clear reforms to reduce emissions and pollution from road transport, both private and public".

According to the commission, this includes investments in charging infrastructure (with a recommended volume of 13,000 stations by 2026), measures to support zero-emission vehicles, higher taxation of older and polluting cars, an increase in clean vehicle procurement for urban transport, as well as a "comprehensive plan for alternative fuel infrastructure".

This is a slap in the face to local and national authorities, who for years have turned a blind eye to large-scale air pollution and the destruction of train infrastructure. Bulgaria is years, if not a decade, behind in terms of transport compared to even the average European level, and the EC knows this, as evidenced by the comments.

A few notes will make the lives of mayors difficult - for example, the requirement to buy mostly electric buses. According to the EC, the Sofia metro must ensure in its expansion project that all trains will have "zero emissions" - which is not impossible, but it is a big challenge.

Everything under Vassilev's hat

There are comments on almost all projects and chapters, many of which are really technical and can be resolved within a month - if Bulgaria wants to complete the process by the end of January.

The giant task of finalizing the document and sending it back for signature falls on the new EU funding overlord - Finance Minister Assen Vassilev. It looks, however, rather impossible for Sofia to finalize the contract with Brussels before February-March.