by Stefan Kolev
Bulgaria, being a relatively small country at Europe’s periphery, seldom receives wide-spread coverage by international media flagships. On July 24, this was different: alarming pictures of Sofia were omnipresent in European and US media alike. The occasion was doubtlessly alarming: In the night before, the police had exercised severe violence on protesters who had surrounded the building of the national parliament. What is the background of these recent events?
More than 40 days ago, mass demonstrations started convening in Sofia every day. The participants, including numerous university and high school students self-organizing via various social media, have been appalled by dubious nominations to high administrative posts by the new government, the most striking of these being appointing a 33 years old notorious media mogul to head the powerful internal intelligence agency. This and other similar steps were interpreted as evident symptoms of the inextricable nexus between the political class and semi-legal business circles. The protests which ensued are to a great extent non-partisan, since most protesters refuse to be related to the opposition party in parliament and accuse the entire political establishment of being susceptible to corruption practices. Thus I prefer the term “cleptocracy” – understood as a more elegant synonym for “cronyism” – to describe the incumbent system, as for the last 23 years unscrupulously enriching oneself at the expense of the public has been the characteristic behavior of most administrations.
Bulgaria’s transition has been a very intricate process. All started in late 1989 when, unlike Central European countries like Poland or Czechoslovakia, the communist elite itself fabricated a turnover of the old regime, very subtly replacing it with new structures in which the old figures of the communist party and its subsidiary organizations managed to retain important “commanding heights” both in the political system and the economy. The old communist party changed its name to Bulgarian Socialist Party (it is the major partner in the current government’s coalition), also some of the leaders changed, but unlike most of the former communist parties in Central Europe, BSP never really turned into a social democratic entity of the Western European type. Reminiscences of the “good old times” when Bulgaria was the most loyal Soviet satellite remain a persistent part of the party’s rhetoric. Of course, the overall picture is not uniformly gloomy: Following the devastating hyperinflation of 1996/1997, Bulgaria experienced some notable macroeconomic successes. In 1997 the IMF helped to install a currency board, pegging the lev to the deutschmark and later to the euro, pronounced monetary stability being the result ever since. Public debt has declined dramatically, with currently 18% of GDP among the lowest in the EU – incidentally a development which Bulgarian economists and protesters see endangered by the government’s new budget proposals and the reactivated plans to construct a new nuclear power plant headed by Russian conglomerates. Also, Bulgaria has one of the lowest tax rates in the EU, a 10% flat tax on personal income and a 10% rate on corporate income. However, none of the past governments succeeded in disentangling the nexus between the mafia-like structures in large parts of the economy and the political class, despite the EU’s (rather sporadic and mostly ineffective) attempts to exercise pressure from outside after the accession in 2007. The institutional quality is thus poor, even compared to the direct neighbors, so after the end of the construction and real estate bubble which burst in 2009, foreign investors have become reluctant to engage in new projects, modest improvements in 2012 not changing the picture radically.
Are protests in Bulgaria unique? Some international commentators attempt analogies to the recent events in Egypt or Greece. There are important differences. In Bulgaria, unlike in Egypt, there are no religious issues at stake; also there is nothing comparable to the sheer power of Egypt’s military. Unlike Greece, there are no anti-Western sentiments in the streets, quite to the contrary, Sofia protesters – rejecting any form of violence – are enthusiastic about the support they receive from foreign media, many EU countries’ ambassadors and European Commissioner Viviane Reding, applauding their rather undiplomatic statements vis-à-vis the current government. Still, there seems to be one central similarity to the protests in the Mediterranean: the call towards “those in power” to abandon their pseudo-elitist complacency. In Sofia, protesters of all generations have raised their voice loudly and have said more than clearly “Enough!” to the establishment of all parties.
It might be that Bulgaria’s transition will eventually have a happy end, which for me means that the country slowly approaches the ideal of a free order, consisting of rule-of-law framing a competitive market economy, a functioning democracy and a vivid civic society. To be more explicit, this is the absolute opposite of turning the country into a small copy of Putin-led Russia, a vision still present among today’s Russophiles in Sofia. What many people in the streets underscore in interviews is a dream of Bulgaria’s becoming just a normal European country, perhaps with a modest living standard like our former “brothers” in Central Europe. Is this utopian? The weeks and months to come can prove decisive for answering this question.
Stefan Kolev, born 1981 in Sofia and Bulgarian citizen, is professor of economics at the West Saxon University of Applied Sciences in Zwickau and managing director of the Wilhelm Röpke Institute in Erfurt, Germany.