Steve Hanke: Co…

Steve Hanke: Corruption Is Bulgaria’s Achilles Heel
Finance – January 5, 2013, Saturday
Johns Hopkins economist Steve Hanke is known as the “father” of the currency board in Bulgaria.

If Bulgaria manages to tackle corruption successfully, the country will become number one on the Balkans, Johns Hopkins economist Steve Hanke, who designed the currency board in Bulgaria in the 1990s, says.

“Something must be done against corruption. If this changes, Bulgaria will definitely have the leading role on the Balkans. Investors are always surprised when they see how good the economic and bank indicators of the country are. The problem is that they refuse to even look at them because of the corruption and the judicial system,” Hanke said in an interview for the Bulgarian National Radio, BNR, Saturday.

The economist further stressed he believed the best part of Bulgarian “history” must be told, with presenting the positives, and not just the negative. He reiterated corruption was the country’s “Achilles’ heel” in preventing economic growth.

Regarding the newly imposed tax on bank deposits, which became effective in Bulgaria on January 1, the Professor voiced strong disagreement with such “political decision.”

“I have been opposing this since the day it was announced. At times of crisis the bank system should not be interfered with. This is a case of pro-cyclic regulation. Times are bad and should not be additionally worsened with imposing new taxes in the middle of the crisis. Other than that, the regulation of Bulgarian banks by the Central Bank, BNB, is a very good one,” said he.

Hanke stated that Bulgaria was one of the very few countries to successfully deal with bank capitalization i.e. in the time of economic boom the country tightened control over banks, and in the time of crisis, this control was eased.

The economist noted his opinion that Brussels and the West in general should have learned a lesson from bank regulation and the successful practices of countries such as Bulgaria and Estonia.

The Corruption and faults in Judiciary system in Bulgaria are not just back-warding phenomena for Bulgaria at time of crisis. They constitute the ‘peak of the iceberg” of a deeper processes  that in fact lead Bulgaria to the bad social results – the current years politics.

Steve Hanke himself provided consultancy for the Currency board, that in fact saved the Bulgarian financial/bank system of the deregulation trend that in fact ruined other countries bank systems and outraged financial crisis.

However politics of shortening social costs, economy regimes, budget cuts are symbols of an attempt to further deregulation in other sectors of economy and thus providing satisfactory ground to shadow economy and criminal practices. As the case with high corruption level and judiciary faults in Bulgaria are.

So – corruption and Judiciary system inadequacy in Bulgaria are answers to the sound bank system development. The first two are main area where crisis could express itself and it is more than evident. The mere fact that the EU authorities recommendations for improving the Bulgarian judiciary system are simply neglected shows that this system is guardian of the deregulation and corruption practices – hence functioning just the opposite to its natural role. 

How Bulgarian Judiciary Could Not Understand EU Messages

София ( 20 декември 2012)Започна заседанието на Висшия съдебен съвет за избора на главен прокурор. Съветът първо ще изслуша тримата кандидати, а след това ще гласува, използвайки електронна уредба."ВСС е пред голяма отговорност да проведе честен вот", каза в началото на заседанието министърът на правосъдието Диана Ковачева. Пресфото-БТА снимка: Асен Тонев(ЕЗ)

The English Language Sofia Weekly (http://www.novinite.com/) today published an article about EU reflections on New Chief Prosecutor Election in Bulgaria. Lets remind that after a series of controversial nominations for supreme judges and other judiciary leaders in Bulgaria. together with scandalous EU funds fraud case “Stoykov-Nikolov” developments in judiciary were put on close monitoring. So, on 22 December a new signal has come on this issue …

EC Says New CVM Report on Bulgaria May Arrive Any Time

The European Commission follows closely Bulgaria’s judiciary and home affairs, with a new Cooperation and Verification Mechanism report possible at any time, an EC spokesperson has stated.

Spokesperson Frederic Vincent’s comment follows the controversial election of judge Sotir Tsatsarov as the Balkan country’s next chief prosecutor.

Vincent has told the Bulgarian National Radio that the EC will not comment on the new chief prosecutor personally. He reminded that EC spokesman Mark Gray recently expressed the Commission’s expectations very clearly.

Gray said that the Commission would closely watch the vote for new chief prosecutor and will prepare a report on Bulgaria’s results in judicial reforms, corruption combat and organized crime.

Gray pointed out that this was not an additional interim report, though local media cites sources from Brussels as saying the European Commission was very close to such a decision.

This was the second time in the last two months when the European Commission has warned Bulgaria over controversial judicial appointments.

The European Commission warned at the end of October that Bulgaria might face an interim report on justice and home affairs in case “the situation requires it.”The warning came after Parliament ignored strong criticism from Brussels, covered up tipoffs against one of the candidates and elected the 2 constitutional judges from their quota, triggering an unprecedented scandal.