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THE DRAMA OF BULGARIAN LAND

  • Under art. 22 of Bulgarian Constitution foreigners or foreign legal entities canNOT own land in Bulgaria.
  • Since adoption of the constitution in 1991 and the respective foreign investment laws it has been a common practice for foreigners to set up companies in Bulgaria and those locally registered entities to buy and own the land. Authorities have treated such precedents with tolerance because of the perception that the judicial registration and tax control on such entities was exclusively Bulgarian. So we have the pattern of foreign owned local owners of Bulgarian land. It is under this formula that many EU and US citizens bought cheap real estate along the Black sea coast and in the ski resorts or in the heritage areas. There have been calls for a legal challenge and a moratorium on this mechanism which has already pumped prices beyond ordinary Bulgarians’ reach.
  • In view of EU accession in 2007 Bulgaria has to abolish its constitutional land ban for EU citizens before signing of accession treaty in April 2005. The amendment bill for art. 22 formally lodged with parliament reads : “Foreigners or foreign legal entities can acquire right of ownership on land under the conditions of Bulgaria’s EU accession or by virtue of an international treaty that has been ratified, published and entered into force for Bulgaria or by lawful inheritance”.
  • The potentially explosive part of the proposed constitutional amendment is: ” …by virtue of an international treaty…” – which its sponsors hope to push through unnoticed with the rest of the cake. One commentator compared this “shy insertion” with the restaurant carriage of a train entering a tunnel and the waiter using the darkness to overcharge the client.
  • There is a broad national consensus that the land ban must be lifted for EU nationals. It is an acceptable price for the expected benefits from EU membership- the large financial aid and the reciprocal options for Bulgarians all over the continent. It is however obvious that third non-EU parties are anxious to book a part of the Bulgarian real estate sweets- in view of geographic location, climate, friendly population and low prices. Those non-EU states have silenced their anxieties once the constitutional amendment was tabled. They should be relying on the “shy insertion” to sign a bilateral treaty in the aftermath of its adoption. They should also have heard at least an encouraging “may be” or “why not” from the Bulgarian top. And that is where the meal is being overcooked.
  • Bulgaria is in a demographic crisis – low birth rate, high emigration, risky changes in ethnic proportions. The price of a flat at Euro 1000.- is a clear prohibition to set up a family and to grow up children. The average monthly salary of an employed Bulgarian is at about Euro 250.-. To compete with foreign purchasing power in order to buy a decent home is nothing less than financial butchery for a young couple. No programs for affordable/subsidized homes.These are the scissors between the promised equal start in the future and the unequal market competition for the land today. How many Bulgarian children will not be born ? Where are the indigenous tribes with sold out land ?
  • We find it a superficial explanation that globalization required such an unlimited liberalization of this market. Leave alone the mentality which refers to such a fictitious sacred table. Land as a market commodity has a unique feature- its increased demand does not cause its increased supply because no one can produce land (like cars for example). Land is as much as it is. So more buyers of land only raise its price i.e. they reduce the access to it. In that sense each country is a kind of a market island for land- when land is bought out you have no choice but to leave and go to another affordable island. Land cannot be imported.
  • It should also make a difference to EU citizens whether on the Bulgarian real estate market they compete only among themselves and/or with wealthy non-EU buyers under bilateral treaties. It is similar to Bulgaria making bilateral visa treaties for admitting non-EU persons in the Schengen area.
  • But why do Bulgarian rulers resort to the “shy insertion” for bilateral treaties and not expressly name in constitution the non-EU buyers ? Because they do not want to disclose such a list fearing a national uproar at election’s eve and risking the voting majority for the amendment as it is ? And would not they have to do the same when signing those treaties ? Yes, they would but under a much easier procedure.
  • A constitutional amendment requires :

a/ the bill to be sponsored by ¼ of all MPs i.e. at least 60 of all 240. ;

b/ it is voted 3 times in as many days and not earlier than a month;

c/ minimum approval is by ¾ of all MPs or by 2/3 i.e. 180 or 160.

Whereas a ratification law of a government treaty for non-EU land buyers :

a/ can be sponsored by council of ministers or by any MP ;

b/ is voted 2 times and could be within a day;

c/ the quorum needed is ½+1 of all MPs i.e. 121;

d/ approval majority is 50% +1 of the attending/quorum MPs which makes 61 Yes (compared to the 180/160 Yes to amend constitution);

e/ Bg MPs are notorious for voting with electronic cards of their absent “honorable friends”- one can often see 20-30 attendees producing 121 votes.

  • The real reason for the “shy insertion” is to deprive the land’s fate of its constitutional relevance and bring it down to the marsh of common political market where a vote of confidence could be traded for such a treaty with the favorite foreign friend. This is the core of the amendment bill which does not smell too well. Are the bill’s sponsors real estate brokers anxious for their foreign policy commission or real representatives of their own people?
  • The good news is that foreign owners of Bulgarian land will sweep away like a tsunami all and any corruption estates, captations and wolf traps within adminstration and justice system related to property law. These foreigners have ablsoutely no sense of humor for the current passive extortion and bureaucratic pocket-picking. In that sense the future guests to the Bulgarian land market are our liberators- from our own selves.
  • Which are the most likely non-EU states for land acquisition in Bulgaria ? If put on referendum that list would probably result in adding the US as a leader and guarantor of modern civilization and Russia- which fought this land back from Turks to Bulgarians in 1878. So the constitution could name EU, US and Russia with no further reference to treaties. The nation’s concern would be to prevent a land property channel for a crawiling ethnic and religious aggression of the kind that fragmented some neighbors. But exactly here is the short circuit with the sponsors of the constitutional amendment- they want an unlimited and non-transparent discretion whom to admit to the land, how, when and at what price. Per constitution international treaties are concluded by government and ratified by government majority in parliament. So the key to a grave decision is being relocated from legislature to executive – this is what they hide! The fierce debate within coming weeks will show whether this nation has an immune system to survive or has contracted a kind of political AIDS that will shorten its future. Let us hope MPs remember that he who sells his conscience sells in fact his children.
  • But we ask again and again : which states’ names are in the friendly open deep back pocket ? Are they Mediterranean ?
  • It is hardly a surprise that in such times cynics are not in short supply. One of them alleged that some foreign powers treated Bulgaria like a pregnant maid to whom nothing officially had been promised. If so it is equally the maid’s fault.

We prefer a quote from John 9,41 where Jesus said:
“If you were blind, you would not be guilty of sin;
but now that you claim you can see, your guilt remains”

January 2005

Braykov’s Legal Office