Q: The US and Bulgaria appear to share foreign policy priorities in developing the Euro-Atlantic prospects of the Western Balkans. How are the two countries co-operating in developing these goals?

A: I think that you are absolutely right to identify the Western Balkans, the Balkans, the peninsula as an area of attention and continuing concern, and that’s kind of a facile statement but it is a true one. We have seen over the course of history and over the course of the last several years the continuing truth that the problems of the Balkans, if left unchecked, become the problem of the continent and of the Atlantic community, and so we are very focused on this region and trying to get it right.

You saw that vice president Biden made a very early trip into the region because he wanted to underscore the importance that the Obama administration places on the region and what I think we can all agree is the still unfinished work to be done in this region. We have found our partnership with Bulgaria in this regard to be extremely helpful and extremely productive for both of us. Bulgaria is a country that is in the Balkans and of the Balkans but yet doesn’t suffer in the way that many of the countries do, from more existential problems.

The countries of the former Yugoslav republics have gone through incredible suffering over the past many years, and I during the course of my own career have been a part of the decisions, and in particular our decisions to intervene militarily, first in Bosnia and then in Kosovo, where there were decisions that we took after great deliberation and some very serious debate. But in terms of what we the United States and Bulgaria do together to try to deal with this region and with the issues of the region, there are lots of examples to point to. We have worked, in the first instance, to try to solve some of the problems whether that was deploying together as Nato allies, and Bulgaria still has troops in Bosnia and in Kosovo, to do the peacekeeping mission once we have finished with the other kind of conflict that we were involved in there. Bulgaria is also participating in the EU mission EULEX.

So we do lots of practical things in terms of problem solving and try to build better institutions. But we are also committed to the longer-term process of repairing, and that’s both facilitating the integration of the countries of the Balkans into the institutions that would help that long-term stability, whether that’s the Nato alliance or the EU, the OSCE and the Council of Europe, but it’s also, and this is the intangible one that is harder for a lot of people to wrap their heads around, the process of political dialogue and the sharing of a strategic vision that allows both politicians and average citizens to conceive of how to get from their current difficulty circumstance to a future posture and reality that is better and more meaningful and addresses their problems in important ways. We do a lot of that, and we co-operate on a regular basis on all of those issues.

For example, then, the Macedonia name dispute, and Serbia Kosovo, so there would be co-ordination, ‘you try to talk to Skopje, you try to talk to Athens’?

Absolutely. We co-ordinate together on a bilateral basis our policy throughout the region.

Energy diversity. We’ve been hearing that the US is very interested in coming to help, encouraging Bulgaria to get serious about energy diversity. My impression is that Sofia is going about it in a way that will compound problems, not solve them. How optimistic are you that we will see genuine progress?

The question of energy is a key one for our bilateral relationship with Bulgaria because we’re interested in Bulgaria’s best interests. But we also look at energy security and diversity as an issue that’s relevant to the entire continent, and so we proceed on our individual bilateral relationships and dialogues on this issue in that broader context. The January cutoff was a real wakeup call here. We have proceeded since that time on a number of tracks that I think are very promising.

The first track that we have dialogued with the Bulgarian Government on is the need to address domestic usage, storage and access, and that relates to everything to expanding domestic storage, capacity, to exploring indigenous resources, and there is an American company that is working to access some natural reserves here in this country, and also we are looking at the very unglamorous, very practical sides of interconnectors and reverse flow and all of that stuff that people immediately tune out because it gets too technical, but in fact are the pieces of the puzzle that when you put it together, represents a solution.

We have also been very supportive of Bulgaria’s efforts to transform certain aspects of how energy is dealt with here. One is the Bulgarian Government’s desire to do away with the "intermediary companies" that are registered offshore, often impenetrable, difficult to deal with. We believe that if Lukoil, Gazprom, any other company is going to do business here, they should do it in a straightforward and forthright manner that has both clarity and accountability associated with it. And then, of course, we have talked about the need for diversity, not just of routes but also of supply, because Bulgaria is in a situation now where it receives 70 per cent of its total energy supplies and more than 90 per cent of its natural gas supplies from a single monopoly supplier.

You don’t have to be a genius or a rocket scientist to understand that creates vulnerabilities. People often ask me, am I pro-Nabucco and anti-South Stream, and the answer that I give publicly and privately is that I am pro Bulgarian interests and what Bulgaria needs to do is figure out where is the most reliable, the most transparent, the most commercially viable course and to combine those three factors in evaluating different projects. But one thing I would mention here before going to renewables: we have worked together with the Bulgarian Government especially on the area of transparency.

We hope to soon be in a position to launch an initiative on transparency in energy transit. We have worked with an organisation called EITI, which is Extracted Industries Transparency Initiative. It is set up and run by the same individual who founded Transparency International, Dr Peter Eigen, who travelled here to Sofia to talk with us about this initiative and actually attended the Energy Forum that was hosted by President Purvanov, and talked about what we might be able to do in energy transit.

We would like to see Bulgaria position itself as a leader in the region by stepping forward and saying, ‘we have taken the steps necessary to create greater transparency in this key part of the energy equation, the transit of energy,’ to publish agreements, to publish revenue streams, and to invite civil society into a dialogue about this.

The final part of the equation is, of course, renewables. Here in Sofia, the embassy hosted along with AmCham a conference dedicated to the issue of alternative, efficient and clean energy, because it is a key part of the picture, and Deputy Prime Minister (Ivailo) Kalfin honoured us by coming to make some remarks at the beginning, and then we had both policy experts from the department of energy, people from American NGOs, like Save the Planet, as well as American companies that sell these kinds of things, and we spent the day talking about the fact that Bulgaria is the EU’s most energy-inefficient country.

In addition to having no energy resources of its own, so it must import almost all of them, it wastes more of what it does import than any other country in the EU. That’s got to change. Not simply because there are these EU criteria that have to be met, and it will be a very hard slog for Bulgaria to meet these, because they are pretty dramatic numbers, but also look at the environmental impact of wasting, and the financial impact. It’s significant. We are looking hard at that, and the advocacy point that I have made specifically on alternative and renewable energies and energy efficiency relates to the economic crisis underway now.

One of my favourite sayings is, ‘a crisis is a terrible thing to waste’ – it’s a principle that president Obama that proceeded on with our stimulus package, to say, we’re not going to just deal with the economic crisis, we’re also going to solve some long-standing problems in the context of this crisis. I believe that Bulgaria has got an opportunity to do that. It can leapfrog over some of these long-standing problems and some of the stalled post-communist development if it will be very ambitious and very creative and try to push – and it can do that in alternative energy, it can do that by attracting foreign investment, it can do that by trying to drive forward in the IT field which is another of my favourite subjects.

This country has some important advantages and some crucial resources and what it needs to do now is pull itself forward…you can solve problems sequentially, or you can just jump over all of them by being very smart and sometimes, I don’t want to say breaking rules, by being innovative.