Bulgaria Defence & Security Report Q1 2008

For Bulgaria, the success of achieving EU entry at the start of 2007 could soon give way to growing risks to political stability, as the broad government coalition loses a key binding issue. There are no indications yet of potential trouble, but with a new opposition party gathering considerable support and 2009 elections on the horizon, BMI does not discount destabilising changes over the next 18 months. Bulgaria has also become an increasingly confident player in regional defence issues.

The Bulgarian defence industry is relatively mature but is having to compete in a fast-moving market.

Bulgaria's ties with NATO led to the trend for defence firms to increase their participation in the modernisation process. According to Defence Minister Vesselin Bliznakov, Bulgarian defence firms are now encouraged to 'actively participate in the tenders and programmes' of the NATO Consultation, Command and Control Agency. The aim is to expedite the interoperability process, and at the same time strengthen the local defence industry.

Military expenditure is set to increase significantly in the short next 1-5 years, with the 2007 budget indicating that expenditure will reach 2.38% of GDP. NATO regulations stipulate that at least 2% of GDP needs to be spent on defence modernisation. To maintain the increased expenditure, Bulgaria receives assistance from the EU, which has committed some US$8.6bn for defence modernisation. In recent years the United States has financially assisted the modernisation of the Bulgarian Armed Force, mainly through the Foreign Military Fund (FMF). In Q108, the FY08 FMF funding request stood at US$13.2mn. Bulgaria also benefits from the International Military Educational and Training (IMET) assistance programme. The programme supports the Bulgarian Armed Forces' officer training development. The FY08 IMET request totalled US$1.7mn. It is likely that the support from the US will continue in the near future as Bulgaria has become an important Eastern European base for the superpower.