Bulgaria: Change Is Needed, Has Been Needed... But Will It Happen?
Novinite is publishing an article by Bruce Hunter, a freelance professional in the UK recruitment industry.
Bruce Hunter gives a critical view of President Plevneliev’s recent call for change in Bulgaria, and challenges The President to right wrongs in one case to demonstrate that The President is able to force change.
He has told Novinite that his negative experience with Bulgarian authorities had followed his life partner's move to buy a property at the Black Sea ten years ago.
Why now? Will changes happen? Why did they not happen in 2007?
Recently the Bulgarian President Mr Rosen Plevneliev has spoken of the need for massive changes in Bulgaria, changes which would radically alter the way the country operates, changes which would move the whole country from darkness to light... And whilst I applaud the need for change, I question why it has taken until now for it to happen, and I question whether it will ever happen if let to Bulgaria itself to make the changes. Let’s examine the detail.
I have been involved in Bulgaria for over a decade, and a country which I saw as one full of promise as far back as my initial involvement in 2004 has continued to be a source of nothing other than frustration ever since. That feeling of frustration has subsequently turned in recent times to almost desperation and indeed anger as I continue to meet and work with outstanding Bulgarians individuals who are now in their thirties and forties, who are unable to fully contribute to a society which is fundamentally flawed.
So how come I have been able to develop these dark thoughts? Back in 2004 my partner decided to buy a property off plan in the delightful Black Sea village of Obzor. What could possibly have gone wrong? Bulgaria was looking as though it would gain entry to the European Union, the developer was a Norwegian with a Bulgarian wife – all was set fair. The accession to the European Union was critical in the decision making process, as with that would come harmonisation of many laws, and any recourse through the court system would be fully enforceable.
What went wrong was that at every twist and every turn over the next years, the developer has been able to manipulate the owners and investors completely, and the Bulgarian Legal System, the Regulators and the Bulgarian institutions have been totally unsupportive of us, the investors, who I view as victims. Amongst the group of owners, there are many stand out individuals who have a lot of surplus cash ready to invest. Had their initial investment in Bulgaria been positive, many more investments could have been made. Due to our joint experiences, none has made further investments, so we can clearly see that not only have the investors suffered, but the Bulgarian economy and its people have suffered too, as Bulgaria has been denied further inward investment through its own inability to enforce its own laws.
I had the privilege of meeting with the British Ambassador to Bulgaria, Jonathan Allen. That was in June 2013. A truly impressive individual who had given us, as owners, a huge amount of support in our quest to gain the basic rights of legal water and electricity, and a condominium run in accordance with the Bulgarian laws. Jonathan demonstrated to me, and to all Bulgarians, a passion for doing things in an ordered, transparent and accountable fashion. Call it “The British way” call it “The European way” call it what you will, but for sure if Jonathan had been listened to and his thoughts acted upon, Mr President Plevneliev would have not had the need to make his recent speech.
Prior to our meeting, Jonathan had delivered a speech, “The Atlantic Speech” in April 201 3 in which he outlined his observations on how Bulgaria needed to reform in order to progress. This is the excerpt from the speech which relates to this very point:
Judicial reform is an economic imperative
In the race to attract investment, Bulgaria has many advantages: the lowest tax rate in the EU (10%); a well-educated workforce; low labour costs; an improving national infrastructure (from a low base).
One of its biggest disadvantages is the inability of companies to enforce a contract in law, swiftly and consistently. Cases drag on for far too long and there is no guarantee that judges will make coherent decisions, even when the case seems open and shut. Bulgaria’s procedural codes are Byzantine in their complexity and even risk impeding justice.
It is natural to put judicial reform in the context of the rule of law and politics: part of some esoteric inter-connected web of issues that makes it the business of judges, NGOs, politicians and for that reason difficult to make progress on. The ordinary citizen shrugs; the businessman is more worried about cash flow.
But it is much more important than that. It is costing Bulgaria investment. It is making its companies less efficient. It is reducing GDP and the spending power of every citizen.
There is a deal to be done: an improved physical judicial infrastructure, more efficient and fairer workload assignation, better training and development for magistrates, in return for the Supreme Judicial Council and the magistrates themselves setting higher standards and taking responsibility for weeding out those not up to the job. This deal could be funded through EU money and proportional increases in court fees on more expensive law suits.
Administrative reform is like judicial reform – these are barriers to business and barriers to wealth. They need tackling enthusiastically and shouting about by the business community.
That speech was given in April 2013 – two years ago - and the full speech can be seen here.
I am indebted to Jonathan Allen for his astute observations, as they completely mirror our own experiences at the development. From the very simple to the more complex, we have found that the Bulgarian legal system can be used to their advantage by the less scrupulous, and the court decisions unenforceable.
Simple situations? Annual meetings are a prime example. Over recent years, owners have held Owners’ General Meetings in June, only to have those very meetings appealed by the developers, who are also owners.The cases have been heard each and every year for the last 3 years, and the scope for appeals and counter appeals is never ending, with judges vacillating in their decisions and giving the developers every opportunity to have “another day in court”
Similarly the cases involving the land registration and what the owners consider to be the theft of common areas by the developers – another two cases which have entered the Bulgarian legal system, and which have never seen the light of day since...
More complex? The electricity supply was illegal from day one. It was obviously so, with the developers controlling the electricity supply and profiting illegally off the owners by charging extortionate prices for electricity. This situation is endemic throughout the Black Sea Coast. It took a concerted campaign by the owners, with the involvement of the then Member of European Parliament Brian Simpson, representations at E-on Headquarters in Dusseldorf, and subsequent meetings with the board of E-on Bulgaria, to bring the case to the Bulgarian Regulator. And what a disappointment that has proved to be! What a pantomime that became, with regulators being appointed and dismissed and a revolving door installed at the front door of the regulator’s office! As an example, Yuliana Ivanova was appointed Regulator, and then it was discovered she had been involved, allegedly, in contraband tobacco in a previous position! Where was the continuity of tenure, who had done the due diligence?
More alarming is that The Regulator has now been in position for some considerable time, and still we have no positive outcome. Our case was ground breaking, in that it was the first time that Act 117 of the Energy Act was imposed in Bulgarian history, a feat of which all owners at Prostor are justifiably proud. But here is the bad news - the substantial fine imposed by The Regulator in 2013 on the developers has yet to be collected, and that whole process is itself caught up in another cycle of court cases and procedures seemingly without end. In the UK, by now, the developers would have either have had to have paid the fine or would have had assets seized... but this is Bulgaria.
At what point does this state of utter chaos in the Bulgarian system look in any way shape or form like the kind of system which allows decent people to prosper? It very much looks like an environment in which the unscrupulous thrive and ride roughshod – and quite frankly a massive disappointment to us as owners that post European Union Accession that Bulgaria had not put its house in order.
So here we are, in April 2015, no further forward in terms of a structured and credible Bulgarian legal system.
So when I recently read that Bulgarian President Plevneliev was making reference to the need to make some radical reforms before Bulgaria becomes host of the Council of the European Union Presidency in the second half of 2018 I was dumbfounded. Why are Bulgarians only beginning to realise that changes are needed? And if the President does want to effect change, will it happen?
This is what the article said:
Plevneliev has also outlined the main challenges facing Bulgaria in most areas of public life.
"In order for the investors to come, instead of the oligarchs, we need legal force and functioning regulators."
Commenting on recent scandals in the judiciary including problems with evidence disappearing from courts and questions over the system for random allocation of cases, Plevneliev insisted reform "will not be delayed anymore."
He added constitutional changes that could allow a wider reform of the judiciary had been discussed during his consultations, but those were longer-term goals and even without them the system could be made more efficient.
Bulgaria gained accession to the European Union on the 1st January 2007. What resistance has there been since then in Bulgaria towards any kind of improvement in the legal system? How much can we believe that the thought of an event down the track in 2018 is going to be the catalyst to any change?
I completely agree with the need for change – but will it happen? The experiences of a number of British and Norwegian owners in a small residential complex is a tiny example of all that is wrong in Bulgaria. My challenge to Mr Plevneliev is a very simple one.
Mr. Plevneliev, involve yourself in the case of our complex, allow us to show you, Mr. Plevneliev where the legal system has failed us. And then, Mr Plevneliev demonstrate to us that you can make the necessary changes to give us the outcome we rightly deserve.
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"this country is cheap for a reason" ---a sophisticated remark;)... Still not all those who want to
buy/to invest in Bg are speculators.
Nice picture, eh? My Swerige and Norvegian friends/partners were stunned when I demonstrated them
the 2 hectare plot of land on the edge of "Natura 2000" forest reserve "Batovo", near Rogachevo village. It remained only to pay for that plot...Oh l? l? ! C'etait incroyable ! ;).....I mean: right You are, Mr Hunter, "to put the Bulgarian Legal System in order" goes without saying, but, on the other hand, my "adventure"
/ at the price of Euro 150,000 (poor me, idiot;)/ is the clear confirmation of the Mr Seedy's ""this country is cheap for a reason" statement
or, by other words: if something is strangely cheap, then we must be utmost accurate...And for me that very "accuracy" is
the synonym to "connnections"...... Connections, Sirs;)
I am delighted that you have taken the time to reply
My intention was not whinge about the current situation. but rather to applaud the comments of the President and hope that this thoughts are turned into actions.
Both the President and the former Ambassador clearly see the need to put the Bulgarian Legal System in order, and if that were to happen the whole country would benefit massively
And no, we have not just been ripped off by the developers, the utliity companies have also been found to be wanting.
So, Mr Seedy, my support for this wonderful country and its young and vibrant professionals continues now as it has for many years - and yes I hope that the much needed changes occur
I owuld be delighted to hear the thoughts of others, I am delighted that the article has been read by over 1000 people - the key question has to be - has the President read it?
Many thanks and best wishes
Or to put Mr Hunter's whinge more succinctly: a bunch of foreigners decided to "invest" in property here because they couldn't afford to do so in their own country (or the other "attractive" countries which were likewise out of their financial reach). So they picked a "cheap" country, fell for a load of marketing BS and got their fingers burned by crooked developers. Clearly, Mr Hunter hasn't noticed all the off-plan scams in the UK going back many years but this affects HIM so it's all down to backward, Byzantine Bulgaria. Now he expects (seriously?) the President of this country to exceed his authority and take up the cudgels on behalf of a bunch of foreign carpet-baggers - all in the name of European Progress and EU Harmony.
You decided to come here because you thought you'd be an "investor" in Bulgaria - or because you thought you were being smart without even bothering to do your homework (yes, where was YOUR due diligence)? Everyone everywhere knows that buying off-plan, especially abroad, is a risky business - there are rewards but with them come dangers; if you didn't bother to find that out before, you certainly know about it now! You weren't an investor, Mr Hunter - you were a speculator, and your gamble didn't quite pay off.
Some of us are quite happy with Bulgaria, warts and all, and see no reason why it should change dramatically just because some greedy foreigners allowed themselves to be suckered by allegedly shady developers. If you like the "normal" anodyne EU countries then feel free to relocate your dreams there - if you can find any that attract you and you can afford.....this country is cheap for a reason!