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It is difficult to talk about competitiveness while a war is raging in the heart of Europe, the head of state stressed at the opening of a forum of The Economist in Sofia

 

Europe must proceed to resolve the existential issues related to restoring peace and guaranteeing its security. This was called for by President Rumen Radev, who opened a forum of The Economist, dedicated to the development of the Bulgarian economy. The event traditionally brings together representatives of state institutions, diplomats, representatives of academia, business and the banking sector.

 

It is difficult to talk about competitiveness while a war is raging in the heart of Europe, the president stressed. According to the head of state, the European Union, albeit slowly, is awakening from its lethargy, and Mario Draghi's critical report proposes rescue measures for the European economy. However, in order to find sustainable solutions, the EU needs to improve its strategic assessments and achieve a balance between economic, defence and diplomatic means to achieve its goals. Above all, it is not enough to simply point out the problems facing Europe, but to examine the reasons for their emergence and development.

 

In his speech, Rumen Radev raised a number of questions related to the factors behind the energy crisis in Europe, the high prices of electricity and natural gas compared to prices in other global powers, the difficulty for the EU to make its decisions quickly, whether it was possible to prevent the war in Ukraine, why Russia produces 3 times more ammunition than NATO annually, according to estimates by the Alliance's Secretary General, despite the huge difference with the gross domestic product of the collective West, why instead of building strong fortification lines to preserve its potential and territory, Ukraine has been encouraged by many leaders to launch a counteroffensive with utopian assurances of victory in contradiction to the principles of operational art, why it is constantly claimed that the collapse of the Russian economy is imminent within a few months after the imposition of the next package of sanctions, and whether a United Europe will accept Russia and the US negotiating peace on the Old Continent without its participation. The head of state pointed out that the answers to these painful questions are not easy and require a high level of competence, expertise, objective and comprehensive analysis, and above all, moral strength and honesty.

 

Rumen Radev also emphasized that the dynamics of geopolitical processes are developing at an extremely high speed, and the security architecture is crumbling. Against this background, the war in Ukraine continues to escalate, established business models are failing, and stagnation has settled in leading European economies. In order to withstand the challenges, the European Union must recognize the seriousness of these challenges, reform its governance structure and decision-making process in order to be able to act quickly and mobilize significant resources for strategic ambitions, which is observed in the United States and China, the President said.

 

Europe is striving to achieve strategic autonomy by promoting innovation and development in all areas of the economy – from raw material extraction, through heavy industry, energy production and storage from its own sources to digitalization and high-tech production. Rumen Radev added that the ambition for strategic autonomy also raises questions about Europe's ability to maintain its moral leadership in the world and its leading role in the protection of human rights, the rule of law and environmental protection.

 

Regarding calls for further increases in defence spending by the European Commission and NATO, the president pointed out that reaching 5% of GDP for defence would be extremely difficult, with some European countries finding even a 1% increase a huge challenge. "This ambition raises legitimate concerns about whether Europe can afford such a step and whether the European welfare state will be sacrificed for the rearmament of the continent," the head of state said.

 

According to President Radev, a subsequent increase in defence spending is possible only on the basis of principles that lead to the unification of European countries, and do not become a factor of disunity in Europe. As an example, Rumen Radev highlighted the call he made in 2019 at the NATO summit in London to overcome the technological and economic gap between NATO member states: while the large countries in the Alliance produce their own military equipment and invest defence spending in their own economies, countries such as Bulgaria, Greece, Romania, and the Republic of Moldova take the planned defence spending from their economies and social systems and invest it in the economies of larger countries. Therefore, according to the President, it is necessary that every purchase of defence equipment and weapons be accompanied by industrial cooperation, and that the partnership between individual countries accompany the entire process of creating and adopting new weapons.

 

During his participation in the forum, President Radev also answered a number of current questions related to the war in Ukraine, the possibility of peace negotiations and the likelihood of resuming gas supplies from Russia upon cessation of hostilities, as well as the danger of the US introducing tariffs on Europe.

 

The head of state pointed out that since the beginning of the war in Ukraine, he has consistently stated the need to understand the specifics and reasons that led to it, and more and more politicians are starting to talk about this. I once again call for using the power of diplomacy as soon as possible to find a solution for a ceasefire and achieving lasting peace on terms acceptable to both sides, the president said. Rumen Radev added that a sustainable solution cannot be achieved without the participation of Europe and the EU must take a visible place at the negotiating table. According to the president, achieving peace will be a very difficult process.

 

Regarding the requests to introduce tariffs on EU imports to the US, Rumen Radev said that such a scenario must be prevented, otherwise the EU will react, and everyone loses from a trade war and artificial barriers to free trade. According to the head of state, the topic will be a test of EU unity, which must be preserved.

 

Asked about the time horizon for the introduction of the euro in Bulgaria, President Radev said that there is a serious debate in our society on the topic and the question is when and under what circumstances our country will enter the Eurozone. According to the President, the government and parliament will take the necessary steps for membership, but at the same time, it is the responsibility of the institutions to create rules to prevent price increases, which takes time and in this regard Bulgaria is late. It is necessary to develop strong, comprehensive mechanisms for monitoring prices, taking into account vulnerable groups in society, otherwise people will be disappointed, said Rumen Radev. According to the President, in order for the new government to have the trust of Bulgarians, transparency is necessary in making its decisions. Very often what is done differs from what was promised and then people lose trust extremely quickly, added Rumen Radev.

 

The President expressed gratitude to the organizers of the forum, who for another year have provided a forum for discussion of important political and economic topics for the future.