Tag Archives: Bulgaria

The Bulgarian Problem of the European Union

The European Union has a big problem with Bulgaria, and may not know it. Here is why.

The purpose of the International Civic and Citizenship Education Study (ICCS) is to investigate the ways in which young people are prepared to undertake their roles as citizens in a range of countries. The study includes all students enrolled in the grade that represents eight years of schooling, provided the mean age at the time of testing is at least 13.5 years. The results from the study are out, and they paint a bleak picture for Bulgaria.

But here I will focus on only one particular finding. Two thirds of eighth graders in Bulgaria may prefer to live permanently in another country. Two thirds of all young Bulgarians at the age of 13-14 that is.

Now, a lot can be said about the implications of this result for the overall demographic development in Bulgaria. The trouble is that even today Bulgaria is aging at a very fast pace. In fact UN data shows that in 2050 the overall dependency ration in Bulgaria will almost double from its 2010 levels. Population will decrease from 7,5 million to 5,4 million. But that is a conservative assessment based on current demographic trends and excluding serious migration movements out of the country. Yes, the intentions of 14-year olds are probably not the best indication of future demographic development, but they certainly give us a warning signal.

Let us not forget that only in a few years all labor restrictions for Bulgarians in the European Union will be lifted. Many EU countries are aging at a fast pace, and their labor markets will welcome Bulgarian migrants.

So far, so good. But these migrants will leave behind an almost dysfunctional pension system, a rapidly ageing society and bleak economic prospects for the young people remaining in Bulgaria. At that point Bulgaria can become a real problem for the European Union due to its failing budget, expansion of poverty (especially in old age groups and the Roma population), and not least – all kind of criminogenic social disturbances.

Obviously we cannot stop young Bulgarians from emigrating if they want to. What they need is sound education and good job prospects in Bulgaria. What they don’t need is escalating government costs, and hence – escalating taxes and social security contributions. Bulgaria finds it difficult at the moment to provide quality education to its children, and is, frankly speaking, quite incapable of developing a robust, sustainable economic system. That is why external help, and probably political pressure, are needed. The prospects for the Bulgarian economy are worsening by the day, and a lot must be done to convince our few children to stay at home.

2010 Reports for Bulgaria and Romania under the Cooperation and Verification Mechanism

The European Commission has published its progress reports for Bulgaria and Romania under the Cooperation and Verification Mechanism (CVM). The reports monitor the progress of the two Member states on progress with judicial reform, the fight against corruption and, concerning Bulgaria, the fight against organized crime.

Both reports say that further assistance and monitoring by the Commission is needed to support the reform processes in Bulgaria and Romania until all benchmarks are fulfilled and the CVM can be repealed. In other words the monitoring will continue for an undetermined period of time.

The reports for both countries are quite critical. For Bulgaria the report seems to underscore the fact that noisy police actions do not necessarily transform into successful convictions. For Romania the main criticism is directed against the new amendments of the law on the National Integrity Agency.

The report on Bulgaria notes a strong reform momentum which has been established in Bulgaria since the Commission’s last annual report in July 2009. The Commission believes that there is strong political will in the Bulgarian government to achieve a deep and lasting reform of the judiciary. According to the report Bulgaria has adopted important reforms of its penal procedures. Bulgaria has increased its efforts to fight against high-level corruption. Bulgaria has also stepped up efforts by carrying out a number of police raids on organised crime groups although little judicial follow-up to these raids has been reported. However, the report notes that the judicial process in Bulgaria lacks initiative and professional capacity. Complex investigations show a lack of direction and purpose, procedures are too formal and too long and often fail in court. The implementation of the conflict of interest law is insufficiently effective. Shortcomings in the implementation of public procurement procedures are widespread.

The Commission points to important shortcomings in Romania’s efforts to achieve progress under the CVM. Romania did not show sufficient political commitment to support and provide direction to the reform process and demonstrated a degree of unwillingness within the leadership of the judiciary to cooperate and take responsibility. Judicial reform has shown important progress with Parliamentary adoption of the Civil and Criminal Procedural Codes. The National Integrity Agency (ANI) was able to demonstrate a further consolidation of its capacity and track record regarding the identification of unjustified wealth, incompatibilities and conflicts of interest. However, the amendments to the law on the National Integrity Agency voted on 30 June 2010 represent a serious step back.

OLAF Activity Report 2010: the Usual Suspect

We now have the 2009 report of the European anti-fraud office, OLAF. The report outlines a number of case studies – misuse of Parliamentary expenses by an ex-MEP, embezzlement by the director of an NGO, widespread corruption and fraud in the management of the Global Fund in Uganda, etc. However, one Member State takes central stage in the report – and that is, yes, Bulgaria.

There were 68 active investigations in Bulgaria in 2009 – the most in any Member state for that period. 26 new cases were opened in 2009 in Bulgaria, out of 32 for the whole European Union. This is really extraordinary given the small population and scale of EU structural funding for Bulgaria. The main reason is that OLAF is currently investigating allegations of widespread fraud in the funding of meat-processing plants in Bulgaria under the SAPARD pre-accession funding program. Now, “allegations” does not mean “committed fraud”, but the issue is very worrying. The main issue here will be to distinguish real fraud cases from administrative irregularities. Given the scale of the investigations, they will have a systemic impact on the meat-processing sector in Bulgaria and thousands of jobs.

Commission Recommendations on the Bulgarian Excessive Deficit

The European Commission has recommended to the Council to declare an excessive deficit for Bulgaria in 2009 equal to 3.9% of GDP. The further Commission recommends the Bulgarian authorities to bring the general government deficit below 3% of GDP in a credible and sustainable manner by 2011 at the latest.

I am not sure whether it is possible to lower the Bulgarian budget deficit below 3% in 2011. There is ample evidence that the Bulgarian government will really struggle to maintain its budget deficit in 2010 at 4.8% of GDP as proposed in the budget amendment currently reviewed by the Bulgarian Parliament. I really cannot see how this can be achieved.

Bulgaria – the Poorest EU Member State

This is not hot news, but in case you had doubts – Bulgaria IS the poorest country in the European Union, based on Gross Domestic Product (GDP) per inhabitant expressed in Purchasing Power Standards (PPS). We’re poorer than Croatia, Montenegro and Turkey, too.

Bulgaria: Rule of Law or a Police State?

There is an interesting article by Vesslein Zhelev in WAZ.EUobserver.com talking about the present state of Bulgarian democracy. It is probably one-sided, but asks important questions.

New Bulgarian Special Criminal Court?

There are news that the government is planning to introduce new, specialized courts for money laundering, kidnapping, human trafficking, organized criminal groups, EU funds fraud.

So far, so good. But the government introduced its plans to a very small group of experts, without inviting some leading NGOs. The leader of the far-right “Ataka” party harassed the representative of the “Open Society” institute and said that its founder, George Soros, is a criminal.

This does not bode well for the draft legislation. I will study the issue carefully.