The European Commission approved a €400 million loan to Bulgargaz, the Bulgarian state-owned gas company that is accused of creating “a backdoor for Russian gas” into the EU.
Brussels Signal has previously reported that Turkey and Bulgaria’s recent gas deal will mean that Russian gas, rebranded as ‘Turkish gas’, can flow into Bulgaria and the whole EU.
Sources close to the EC’s dealings with Bulgargaz and the Bulgarian Government have described the move as “a massive cock-up on the part of the Commission”.
The approval is also surprising, as the Commission is still entangled with Bulgargaz in a long-running battle over the anti-competitive behaviour of the company and the Bulgarian government.
The EC’s press release from October 10 says the loan is a “measure to support Bulgargaz in the context of Russia’s war against Ukraine.”
Bulgaria is ploughing ahead with a gas deal that will create a European “backdoor for Russian gas”, despite European Union objections. https://t.co/xvNf7yuX3j
— Brussels Signal (@brusselssignal) September 15, 2023
The Turkish-Bulgarian gas deal was signed in January 2023. Among many of what observers see as its worrying provisions is one that prevents the Turkish gas company from disclosing the gas’ country of origin.
Also highlighted is the penalty clause that makes it almost impossible for Bulgaria to renege on the deal.
It seems likely that there will ultimately be no way for either the EU or the Bulgarian Government to ensure the gas is not of Russian origin. As a memo seen by Brussels Signal reads, “gas molecules have no label of origin”.
While the EU has a target date of 2027 to eliminate its use of Russian gas, the Turkey-Bulgaria deal’s 13-year duration means Bulgaria could import Russian gas into the EU long after that deadline.
Russian President Vladimir Putin had also earlier expressed his hopes of “establishing a gas hub in Turkey in the near future” during a meeting with Turkish President Recep Erdoğan in the Russian city of Sochi.
News that the EC is granting Bulgargaz the loan comes as it also investigating the company for anti-competitive behaviour. Under EU rules, Member States are supposed to ensure fair competition between energy companies.
This is not the case with Bulgaria or Bulgargaz, as the company was previously fined €77 million over breaching the rules by the EC in 2018.
The penalty was met by outrage by the then-Bulgarian government, which declared it would not recognise any such EC decision. The fine is currently still under appeal.
Bulgarian promises to reform the energy sector have also gone unfulfilled; Bulgargaz still enjoys 90 per cent of the country’s gas market share.
The Brussels Signal inside source said the whole situation looked “like the Commission’s left hand didn’t know what its right was doing”.
