WSJ: Crime Crackdown Boosts Budget Crackdown in Bulgaria

By Joe Parkinson

Wall Street Journal, January 12

Bulgaria, which joined the EU in 2007, has been criticised by Brussels for failing to curb high-level corruption and organised crime after dozens of businessmen, gang bosses and others were shot on its streets in recent years. In this 2008 picture, relatives follow a hearse carrying the coffin of bestselling Bulgarian crime writer Georgi Stoev, killed by a gunshot to the head. Stoev was known as the chronicler of the underworld for his nine books on the origins of the Bulgarian mafia.

Bulgaria’s crackdown on organized crime is boosting its government’s coffers, helping to remold the European Union’s poorest member as an unlikely fiscal model for the bloc.

Almost 100 ‘mafia motors’ seized by the center-right government of Boyko Borisov since it swept to power in July are now being used by government ministers and state bodies to save cash and bolster the budget, according to finance ministry records.

Treasury chief Simeon Djankov is chauffeured through Sofia in a racing-spec Audi Quattro that was impounded containing 10 kilos of heroin en route to Western Europe from Turkey. Super-slick Mercedes vans and Grand Jeep Cherokees that once belonged to mobsters are now used by government ministers, schools and even Orthodox priests. Others are auctioned off to generate revenue for the treasury.

Djankov, who has drawn accolades from economists and policymakers for his swift moves to reduce Bulgaria’s budget deficit to 0.8% in 2009, the EU’s lowest, says the government wants to send a signal to Bulgarians that it isn’t wasting resources as it slashes public spending and cuts government jobs.

“It also sends a signal to the criminals that we’re on their tail,” Djankov said in an interview in Sofia.

The government plans to seize and bank more mafia assets - and its creative steps to boost revenue appear be changing perceptions in Brussels.

Herman Van Rompuy, the new EU president, on a visit to Sofia in December said Bulgaria is “back on the right track.”

But those gains are fragile — the gangland assassination last week of Bulgarian investigative journalist Bobi Tsankov, shot in the back in broad daylight outside an office building in central Sofia — shows Bulgaria has a long way to go to permanently repair its bad boy image.

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