(Source: European Commission)
“Check against delivery”
Dear Deputy Prime Minister,
I should start by thanking the organizers for the invitation to address you, which gave me the opportunity to visit this beautiful country.
My warm congratulations for the timely topic. The climate and energy transition, innovation and investment are all key ingredients for our collective prosperity.
But for this to work, such prosperity needs to be shared and spread. This is why the transition needs to be just or there is just no transition. Moreover, this is not just about the economy. The brutal and tragic events in Ukraine and the weaponization of energy supplies remind us, that the green transition, a sustainable economic model, modernisation and reforms are closely tied to our own security.
Bulgaria is well placed to understand this as it is being faced with these different challenges simultaneously. In these uncertain times it is important to know that in the face of adversity, our greatest asset, our strongest shield is our Union and our commitment to leave no one behind.
Bulgaria has come a long way since its accession to the European Union. Cohesion’s convergence motor has been actively supporting the economy to catch up – slowly but steadily – with the rest of the EU, with a combined investment of some 15 billion euro over the last decade and a half. During this period, GDP per capita in Bulgaria has increased by some 16%, rising from 39% of the EU average in 2006, to 55% in 2020. This growth, however, has been uneven in the different regions of Bulgaria, with the Southwest region nearing the EU average with 92% of GDP per capita, with Sofia being a strong engine for the economy, and others lagging significantly behind, particularly in the North of the country, where the income per capita remains a little over one third of the EU average.
For a prosperous and resilient Bulgaria, today and for the years to come, it is crucial to ensure that the convergence trajectory with the rest of the EU is reconciled with balanced regional growth, leaving no one behind. This is the only way to ensure that this convergence is solid, sustainable and long lasting.
Over the next years in order to deal with the post-pandemic impact and the current situation in Ukraine, Bulgaria will be able to count once again with European solidarity. 17 billion euros in grants from Cohesion and the Recovery and Resilience Facility are available to modernise the country, support innovation, decarbonisation and energy security.
Cohesion policy alone will invest some 11 billion euro in Bulgaria and particularly in the development of the Bulgarian regions most lagging behind in the period 2021-2027.
So today’s conference could not be timelier as we move into the final stages of negotiation of our Partnership Agreement, the framework document that will steer EU Cohesion support for the period 2021-2027.
How to promote growth and investments that are environment friendly, contribute to Bulgaria’s energy security and make the country more socially and territorially cohesive? This is the 11 billion euro question that our Partnership Agreement will have to answer.
This will have to be done in complementarity with the strategy and investments foreseen for the Recovery and Resilience Plan and will also need to factor in the most recent RePowerEU objectives of accelerating clean energy, efficiency savings and diversification of supplies, to address the geopolitical reality we face.
Cohesion policy will support all these objectives, with investments in energy efficiency, renewables and decarbonisation of transport in Bulgaria. In the Partnership Agreement under negotiation 2.4 billion euros will be for climate related investments, including a 27% share of energy from renewable sources.
But we know that phasing out fossil fuels, decarbonisation and energy transition will pose a particular challenge in Bulgaria, which consumes 3.6 times more energy resources per unit of GDP than the EU average and where coal plants account for more than 40% of electricity generation.
Moreover, this effort cannot become a new source of regional and territorial divide, in a country that needs to bridge its existing internal disparities.
This is why we are so keen that Bulgaria can make the most of the support given under the Just Transition Fund (JTF). The JTF in Bulgaria will dedicate 1.3 billion euros to address the socio-economic fallout of the transition, focusing on the most impacted regions – Pernik, Kyustendil, Stara Zagora, to support them in the transition to a zero-carbon economy.
The communities living in these regions will face a declining industry and thus a declining source of sustenance. However, even if fossil fuels have no future, these communities, the people living in these regions, should have a future, an opportunity to earn an income and participate in the future economy.
This was my key message to the people of Vidin, where I was yesterday, to the communities in Pernik, Kyustendil, Stara Zagora with whom we will walk the path to green transition together.
Our goal is to help them develop new skills, find new source of local employment and economic activity, including energy diversification and renewables.
In addition to the JTF, the Just Transition Mechanism will include support for private and public investments in the development of these areas.
A major ingredient for the success of the Just Transition support will be the Territorial Just Transition Plans, defining clear milestones toward the 2030 and 2050 targets, and the decision taken on the respective transition measures for each region.
The Plans are essential to unlock investment under the Just Transition Fund and Mechanism.
These plans should be decided in close consultation with local people. Just Transition partners – regional and local, economic and social partners, trade unions and the workers they represent, civil society and young people – they should be involved in all stages in the process.
My key message to Bulgaria is a call for urgency: to prepare and finalise these Plans, without further delay and put JTF money into operation –in order not to lose any of the financing available, which has a very tight time horizon for investments.
So I urge you to mobilise all stakeholders and take the decisions – how things will look in a modern, clean, green Bulgaria, and how to use European investments to get there.
In doing so we cannot forget that the climate emergency, the industrial revolution caused by the digital economy, the security crisis provoked by Russia’s brutal war are all interlinked and part of the same challenge.
We can only succeed if we address them united as European Union, and together as a society, bridging the gaps and avoiding the traps of leaving parts of our population or territory behind.
To quote a favourite writer of many generations of Bulgarians, Elin Pelin, “Opportunities exist, so we can take advantage of them”.
On this ambitious task of seizing the opportunities of these multiple transitions you can count with Europe’s support you can count with cohesion policy’s support, you can count with my personal commitment.
I look forward to our discussion!