Gas tax for Schengen freedom? A last-ditch attempt to break the Austrian deadlock

For now, however, there is little sign that Vienna will go the whole hog. Austria's Mr Karner announced on Monday that, at this stage his country would only allow the two Balkan countries into the "air Schengen." This would remove passport checks at airports, but it is far from a real accession to the free travel area and will not alleviate the border queues that plague the Bulgarian and Romanian economies. In a response to the Austrian Internal Minister's words, Prime Minister Nikolay Denkov announced that this is insufficient and Bulgaria should become a full member of the visa-free area.

So that's what the tax was about

If the country is allowed to join Schengen after Monday's events, this could answer a number of questions about the introduction of the gas tax by Finance Minister Assen Vassilev and the insistence on its implementation, including its budgeting as revenue. Since its introduction, the fee raised many questions and has been heavily criticized for its puzzling goal and working mechanisms, such as obliging the state system operator Bulgartransgaz to collect the money. It also remains unclear why it was inserted in one of the draft budgets for 2024 (then withdrawn), with the expectation to bring in 2.5 billion levs in revenues throughout the next fiscal year. .

At the time the levy was introduced a few weeks ago, the 20 levs hike was equivalent to a 20% increase of gas prices on the European exchange (currently it would amount to a 30% surcharge). Despite the implementation of the measure, absolutely nothing has been collected to date, proving both the impossibility of such an initiative and that a Schengen bargaining scenario may have been conceived from the outset.

The disputed fee

According to the statement of the politicians from the ruling coalition, Bulgaria will henceforth not pursue its own policy on Russian gas supplies and will rely entirely on the joint policy of the European Commission. Currently, Brussels has been drafting a law to give member states the power to suspend gas imports from Russia and Belarus by banning companies from the two sanctioned states from buying capacity in EU pipelines and LNG terminals. Curiously, until recently, WCC-DB MPs have argued that the tariff is actually aimed at hurting Gazprom's interests in Europe and thus accumulating serious revenue for Bulgaria.

The levy stirred the pot in South-East Europe because of its scope, as Serbia and Hungary are directly dependent on the quantities of Russian gas that flow through Bulgaria via Turkish Stream. The private Greek companies DEPA and Mytilineos were also unhappy as they work with Russian gas that transits through Bulgaria.

What about the "air Schengen?"

In any case, it is questionable to what extent Vienna would call Bulgaria's bluff. So far, what we know is that the Austrian Interior Minister has himself tried to use the occasion for his own country's diplomatic gains. In his Monday statement announcing the readiness of Austria to relax its position on Schengen, Mr Karner demanded three things from Brussels, Sofia and Bucharest:

• Tripling the Frontex mission in Bulgaria with EU money in order to strengthen the EU's outer border;
• Increased border controls between Bulgaria and Romania and between Hungary and Romania, respectively;
• Both countries accepting Afghan and Syrian asylum seekers who have reached Austria after crossing them first.

He then passed the baton to Brussels to take the measures requested by Austria: "It is now the Commission's turn." The European Commission for its part described Austria's proposal as a positive development. "We are happy to see that things are moving in a positive direction," a Commission spokesperson said on this occasion at a press conference on Monday.

The result of all this three-way lobbying will emerge during the leaders' Brussels meeting on 14 December, where Bulgaria will be represented by PM Denkov. On Sunday evening, Prof Denkov slammed the additional requirements coming from Austria. "We have never discussed our entry into Schengen in this way and it is not acceptable as defined. To introduce additional rules for Bulgaria and Romania is not admissible. The idea is to comply with the rules of the European regulation, which we already cover. If someone wants specific rules for Bulgaria, this is definitely not acceptable," he told bTV.

What is more, the benefits of partial Schengen entry that would only affect airports is only going to help tourists and business travelers, while the big problem - the land border truck and vehicle queues - would remain in place for the foreseeable future.