Bulgaria urged the European Union on Tuesday to allow countries in the Nabucco pipeline to write off bank guarantees they are to extend from their fiscal deficits, to show the gas link is a priority for Brussels. "We have always put the Nabucco pipeline as a priority ... But I have many, many remarks on the speed of work and on its actual, real position as a priority for the European Union," Bulgarian Prime Minister Boiko Borisov told an energy forum.
"My proposal is for member states in Nabucco, the bank guarantees that we will give to the European Investment Bank, or the European Bank for Reconstruction and Development ... to be written off the deficits of these countries," he said. Borisov said if the fiscal leeway was not provided, Bulgaria would be forced to breach the EU's threshold for a deficit of 3.0 percent of gross domestic product. Bulgaria's state company BEH is one of the shareholders in the 7.9 billion euros ($10.39 billion) pipeline, aimed to transport Caspian gas through Turkey and eastern Europe to Austria and cut the continent's dependence on Russian gas.
Other shareholders include Austria's OMV (OMVV.VI), Germany's RWE (RWEG.DE), Hungary's MOL (MOLB.BU), Romania's state-controlled Transgaz TGNM.BX, and Turkey's Botas.
Each shareholder has to provide about 2 billion euros in bank guarantees, the head of the Nabucco consortium, Reinhard Mitschek told reporters on the sidelines of the same forum.
Borisov's offer concerns Bulgaria and Romania, which will have to provide state guarantees for Nabucco. Borisov said Bulgaria would not block the project in case Brussels turned down its request, but said it would be a bad signal to Bulgaria and push it to an excessive budget deficit.
The Balkan country hopes to bring its fiscal deficit to 2.5 percent of GDP next year, after a prolonged recession and hidden deficits piled up by the previous Socialist-led government is likely to push its budget shortfall to 4.6 percent of GDP.
Last week, the spokesman of the Nabucco consortium said the first gas contracts for the Nabucco pipeline should be sealed by the middle of 2011 as gas supply talks with Azerbaijan had intensified.
The pipeline, which competes with Russia's South Stream gas pipeline, is expected to become operational in 2015.
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