Bulgaria toes line as US plays Huawei card | Business | Economy and finance news from a German perspective | DW | 01.11.2020

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Bulgaria toes line as US plays Huawei card

Crisis-hit Bulgaria has joined other Balkan countries in signing a security agreement with the US on high-speed Wi-Fi networks as part of a US campaign to exclude Huawei from 5G networks. Sofia had little real choice.

Bulgaria last week joined other Balkan countries in signing a security agreement with the US on high-speed wireless networks as part of a Trump administration campaign to exclude Huawei in 5G networks around the world.

Washington believes Huawei poses a threat to its national security and that of its allies and that the Chinese technology company was using its technology to spy on behalf of China's government, a claim that Beijing says is driven by US commercial concerns. Washington has been urging its allies for several years to shun network equipment from Chinese vendors such as ZTE and Huawei, particularly for their 5G build-outs.

Bulgaria has joined its regional neighbors, the Republic of Kosovo, North Macedonia and Slovenia, as well as Slovakia, in signing 5G security agreements with the US as part of the so-called "Clean Network" declaration.

Other countries that have also signed on include Romania, Greece, the Czech Republic, Poland, Sweden, Estonia, Denmark and Latvia. Two G7 nations, Italy and the UK, have banned Huawei from their 5G rollouts and despite reservations, Germany and France, along with Netherlands, Switzerland, Spain and Portugal, are expected to follow soon.

Watch video 02:47

Bulgaria's anti-corruption rallies enter third month

Bulgaria up for grabs?

As 5G has not yet been commercially launched in Bulgaria, no companies are making 5G services available nationally yet. However, the three operators in the Bulgarian market — A1 Bulgaria, Telenor and Vivacom — are preparing to provide these service over the course of 2020-21. Prime Minister Boyko Borissov did not say whether the US agreement would affect the choice of vendors available to Bulgaria's operators. According to publicly available information, Nokia and Alcatel, as well as Huawei, are interested in the development of the 5G infrastructure.

Bulgaria's decision to join the secruity agreement comes as the country grapples with an ongoing political crisis, which has been aggravated by the COVID-19 pandemic and economic problems. Bulgarians are demanding the resignation of Borissov and Prosecutor General Ivan Geshev. Protests are now in their fourth month and elections are slated for next March.

Bulgaria is the poorest country in the EU, with per capita gross domestic product (GDP) of $10,000 (€8,560), which is 20% less than in Greece. Some 22% of the population of the 7-million strong country live below the poverty line. By the end of the year, the economy is expected to decline by 7.2%.

Adding to the potent mix, Brussels has raised its concerns about the lack of accountability of Bulgaria's prosecutor general, the independence of its judiciary, the impartiality of its anti-corruption body, links of media owners with political forces and the harassment of journalists.

According to Transparency International, Bulgaria has the highest level of corruption susceptibility in the EU. According to the World Justice Project's Rule of Law Index, Bulgaria is on par with Russia in terms of government corruption.

Watch video 02:53

Germany must no longer 'sit on the fence' over Huawei

Join the gang

It was in this context that US Secretary of State Mike Pompeo visited Central Europe in August, warning against both Russian and Chinese influence in the continent. The same month, the Trump administration announced its Clean Network program to counter "long-term threats to data privacy, security and human rights posed to the free world from authoritarian malign actors, such as the Chinese Communist Party."

"Bulgaria's move is a result of Mike Pompeo's diplomatic tour around Europe," Jan Mus, a Balkan expert based in Warsaw, told DW. "The US speaks with each of the states separately, promising some deals, economic and political. This reflects the US influence in the region and its soft power. Everyone in the region wants to be 'an ally' of the US and/or have news devoted to successful diplomatic US visit," Mus said.

Others agree. "Bulgaria's decision can be explained by a strong political message from the US, delivered by Under Secretary of State Keith Krach who is visiting Bulgaria and the region this week," Georgi Kadiev, an opposition MP, told DW. "Neither 5G, nor Huawei is an issue in Bulgaria's political turmoil at present, with elections coming up in six months, a lockdown on the horizon and anti-government street protests taking place every day."

Kadiev says the government most likely joined the network to avoid being squeezed and questioned by the US about corruption and other sensitive issues.

Watch video 05:14

Protests against corruption in Bulgaria

China and Russia put on the pressure

The US perceives certain interests in Bulgaria, and Europe more generally, to be at odds with both Chinese and Russian influence in the region.

At the end of last year, Russian President Vladimir Putin expressed his dissatisfaction with Bulgaria's delay in the construction of the Trans-Balkan Gas Pipeline on its territory, which will allow Russian natural gas coming through the Russian Turkish Stream gas pipeline to be delivered to other European countries. In 2019, meanwhile, Borisov discussed with Trump the possibility of supplying American liquefied natural gas (LNG) to Bulgaria.

Then there is China. "Since the global spread of COVID-19 China has become increasingly belligerent in its foreign policy and military actions causing European nations to reconsider the nature of the regime and their state-to-state relationships," said Nicholas Eftimiades, a professor at Penn State University's Homeland Security Program. "Also, the US has been successful in its campaign to inform the world of the potential vulnerabilities inherent in 5G networks. The combination of China's autocratic behavior globally and a newfound awareness of 5G vulnerabilities is causing European countries to reject Huawei."

Bulgarians protest their government

Many Bulgarians are fed up with their government, with protests ongoing for four months

Biden to hold course?

The Trump administration has generally taken a hard-line course toward China on trade and foreign influence, and the upcoming presidential election opens up some uncertainty as to how things will develop between Bulgaria and the US.

"I do not expect a Biden administration to significantly change the US position toward Huawei due to the national security implications," Eftimiades said in reference to a possible election win by Democratic candidate Joe Biden. "A Biden administration would be far more likely to yield to Beijing's policies. However, US-China relations is a bipartisan issue in Congress that will constrain the actions of the next president."

"Bulgaria has a generally Russophile population and a government that tries to navigate between Russia and the US, as well as between Turkey and the EU. My guess is Bulgaria's next government, with elections due in late March, will be forced to take a firmer pro-US stance," Kadiev concluded.

Mus, however, takes a more skeptical line. "Taking into account the fact that Obama once withdrew from a deal he had made earlier with Poland against Russia, and the case of Kurds left on their own in the Middle East, standing with the US against China seems to be a risky business," he said.