George Veltchev: Capital Daily War against Corporate Commercial Bank is Quite Sad, Rather than Funny

Novinite Insider » EXPERT VOICES | April 1, 2013, Monday // 12:44| Views: | Comments: 0
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Bulgaria: George Veltchev: Capital Daily War against Corporate Commercial Bank is Quite Sad, Rather than Funny

George Veltchev is a longstanding investor in Bulgaria, doctor of economics from the Vienna Economics University, and master of business administration from Harvard and Insead. He has taught economics at Harvard College and the Sofia University Kliment Ohridski, was elected President of the Harvard Club of Bulgaria in the first year from its inauguration in 2001, and is a regular reader of Capital Weekly.

The opinion published here is his own, has not been edited and does not express the opinions of this newspaper, or any other institution, to which he may have been or is currently related.


While the Bulgarian people at large are probably finding the past fortnight's media warfare amusing, I am for one not very amused, having been myself, in the past 12 years, a target of reports of a particular kind - "let me smear his name in the paper, and leave him to explain that he was right". Throughout that time, I have collected enough exhibits of poor reporting with quite transparent corporate interest behind it that I can open a decent museum of yellow press with the active participation of otherwise serious papers.

I am quite convinced that the Bulgarian and international business, but also the European institutions, are as unimpressed as I am, each for its own reasons, but all for one common reason - that the show on display is quite sad, rather than funny, as a Bulgarian saying goes.

I respect Capital Weekly for its very decent analyses, and the correct, at least in my own beliefs, economic policy position. After all, I have taught students at Harvard College in the class of Martin Feldstein, whose macroeconomic teachings seem to be reflected very often on the newspapers pages. Also, I can rely on the reporters of Capital Weekly to leave no important economic topic in Bulgaria without attention.

This is why I find the events of the past couple of weeks shocking, and I ask myself a number of questions, all possible answers to which are rather ugly. I hope the readers of the paper, but also the government officials, are asking the same questions:

1. Why are there over 20 articles about Corporate Commercial Bank (CCB) and its owner over the past 2 weeks in Capital Online (and I presume Capital Daily), more than the number of articles of the past 5 years, on the same topic? Did they just learn about the deposits of the state-owned enterprises or they have less fear now? What is the value to society of a newspaper that writes different stories in different states of fear?

2. Why is there so much abusive language that you find occasionally in the yellow press, but never in a responsible media and why does Capital Online refuse to get any alternative side of the story? There are a number of "independent opinions" quoted, so here is mine, as well:

"It is not a decent way of doing business for a respected paper to apply daily pressure on the government to take measures against a competitor, nor is it decent to spell out and dictate what are the most effective measures the goverment can undertake against its competition. The government can do away quite quickly with half of the business in Bulgaria, if it wants to, but the inevitable reaction for the investors in the country will be to do away with the economy by voting with their feet, and then the voter will do away with the government, when it gets the inevitable utilities rationing. Just ask the socialists - they wrote the book on that. Or ask Capital Weekly - they have always been among the biggest proponents of reducing the government's role in business, including banking."

3. Is this the most important topic in the 20-year history of corruption in Bulgaria, since UDF invented it in Bulgarian politics and made us now world famous for it - where were Capital Weekly's 10 articles for every week of the megacorruption of 1998-2001 - a kind of corruption Bulgaria has never seen before or, indeed, after that? Where was Capital Weekly to report how, during the government of HM Tsar Simeon II, Bulgaria climbed up the ladder of Transparency International leaving almost 1/3 of the current members of the EU behind it - a position that looked under UDF, and now, more like a desert dream?

4. If Capital Online are so concerned about the media ownership concentration and the mixing of economic with media interests, which is a very reasonable concern, do they agree with me that a law on the clear separation of media ownership from other business interests, and its enforcement, is a significantly more important issue for Bulgaria than the issue of where to deposit the state-owned enterprises' current funds, which are barely equivalent to 1% of the budget? And if they agree with me, I would be looking for their guidance on which issue of Capital Weekly I should read to find their step-by-step guide of how the goverment can prohibit large investors in other sectors of the economy from owning media, including Economedia.

5. Why did Capital Online so (in)competently involve Bulbrokers in its crusade and who is the person at Bulbrokers that has such poor competence in mathematics that they managed to calculate a price of 130 million euro for the latest restructuring of BTC by "conveniently" ignoring the company debts? They are well advised to find out and let this person go, as quietly and quickly as possible, before their clients let them go - the world is witness to what happens to financial institutions with poor command of mathematics in Cyprus.

The professionals of Capital Weekly do not deserve this - they are reporters whose articles have always been a trustworthy source of information for Bulgarian business, and for me in particular. Each article of a select few of their colleagues written in service of corporate interests negates the honest labour of tens of real professionals in that paper, and hundreds all over Bulgaria.

The caretaker government does not deserve this either, and Capital Online is doing it a great disservice - since it is presumed by definition that the government is not a party to the conflict between Capital Online and CCB, now it is left in a position that any action, regardless of the good intentions, will be interpreted by the business community as taking sides in the conflict, and the international business will altogether refuse to have any of it. The prime minister answers a reporter's question on the timeliness of the actions by saying "Why do you feel we are in a rush? 23 years have passed without action." And the business is asking - "Is this the most important priority for the government in its limited 3-month life span - to take a side in a fight between corporate interests, and is this the biggest risk for the finances of the country - how many banks will be selected for the deposits of the state-owned companies, which represent in total barely 1% of the budget?" Is this the most desired legacy of this caretaker government - to have helped one businessman who envied another for his inability to participate in an alleged sweetheart deal?

And should I expect now, with bated breath, to learn from the papers about scary dependencies between my 20 or so companies in Bulgaria, and the quoted 107 companies that Capital Online alleges are linked to CCB on the basis of some vague data of similar auditors and lawyers' addresses, or indeed that this opinion is a "preventive strike" in anticipation of some "invented action"?

Did I forget to mention that those articles 10 years ago about the "Black Sea oligarchs" where there was 1 truth for every 9 lies, found their inception in Capital Weekly, "the most professional printed media in Bulgaria" according to ... Capital Weekly. Have I mentioned or attacked them in the press, or their editors or publishers, over the past 10 years? I didn't think so ...

I hope 10 years are a good track record so Capital Weekly can recognise that I have never used media for corporate aims. If they decide to join me, who knows - maybe they will lead by example and the sorry reputation of the Bulgarian media slowly starts its journey from the inflection point it put itself in.

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