South Stream Pipeline Threatens EU Unity On Russia

Bulgaria is accusing its fellow EU nations of placing Sofia uncomfortably in the middle of a dispute between Europe and Russia over the unrest in Ukraine. The situation also is threatening the stability of the Bulgarian government.

The European Commission has directed Bulgaria to suspend work on the South Stream Pipeline, a conduit through Bulgaria for supplying Russian gas to Europe that bypasses Ukraine.

The EC withdrew its approval of South Stream construction in March after Russia annexed Ukraine's Crimean peninsula. It also says the pipeline violates EC rules against gas suppliers controlling pipeline access.

Despite this, Bulgaria decided to continue work on the pipeline, which is being built by Russia's state-owned gas company, Gazprom. Bulgaria, the EU's poorest member, depends on Russian gas and hopes to stockpile it. Russia wants South Stream to ensure uninterrupted income from EU customers.

"This is a priority infrastructure project and I hope the European Commission will find more solidarity in its future relations," said Dragomir Stoynev, the economy and energy minister of Bulgaria. "The point is to avoid South Stream being used as a hostage of future relations and of the conflict between Ukraine and Russia."

In Sofia, the liberal Movement for Rights and Freedoms (DPS) Party, a junior partner in the government, said Bulgaria should comply with the EC's call. Party leader Lyutvi Mestan told parliament that defying Brussels would be dangerous, and said the government should press its national interest "in cooperation, not in confrontation" with Europe.

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Mestan said the dispute demonstrates that the current government, elected in May of last year, has failed in its mandate. He called for early elections to be held in late November or early December.

Dimitar Dabov, a leader of the ruling Socialist Party, dismissed Mestan's demands and said the pipeline will proceed as planned.

But Slavtcho Neykov, formerly head of Bulgaria's EU integration for the country's economy and energy ministry, said that to continue building the pipeline would be a "disaster."

"Russia is Bulgaria's main partner for energy, and the South Stream is a good option for us," Neykov told Bloomberg News. "But first and foremost, we're an EU member, and we shouldn't forget that."

By Andy Tully of Oilprice.com