Bulgaria to Not Contest EC Decision on Land Swaps

Bulgaria in EU | November 27, 2012, Tuesday // 17:06|  views

Bulgaria's land swaps became notorious, since they frequently involved attractive state lands exchanged for properties of much less value. File photo

Bulgaria will not appeal and will accept any decision of the European Commission in its probe of the notorious land and forest swaps made between 2005 and 2009.

The statement was made Tuesday by the country's Agriculture Minister, Miroslav Naydenov, cited by BGNES.

He explained that there were three possible outcomes – exoneration of Bulgaria, establishing a legal violation, or establishing illegal State assistance, none of which would be contested by the Cabinet of the ruling Citizens for European Development of Bulgaria party, GERB.

Bulgaria's land swaps became notorious, since they frequently involved attractive state lands exchanged for properties of much less value. Some 111 200 acres of state land have passed into private hands since 1998.

The Commission is investigating whether those constitute illegitimate State aid to private individuals and firms. Brussels has also reportedly pointed out 13 swap deals that must be annulled because of manifest breaches of legal regulations.

If the probe establishes that the swaps can be considered State assistance, those individuals, companies, and municipalities, who have benefited from them, will have to refund the State budget an amount equal to the difference in prices.

The EC decision to begin an official investigation of the swaps dates from June 2011, and involves 147 such swaps. It does not provide for on the spot inspections, but rather an exchange of information and documentation between all parties involved.

Dubious exchanges of State lands have led to the filing of charges against the Minister of Agriculture from the former cabinet Nihat Kabil.

Some of the swaps have gained notoriety as they were in favor of well-known businessmen and involved lands promising for developing tourism. One of the probed swaps involves a company of the GERB Member of the Parliament, Emil Dimitrov, who is said to be close to Prime Minister, Boyko Borisov.

Naydenov now confirms that if EC establishes that the swaps were illegal State aide, all those who benefited will have to reimburse the difference between the market value of the forests and the amount paid at the time of the swap or return the forests to the State.

In connection with the case, the Parliament is launching a work group to be chaired by GERB MP and Head of the Parliamentary Legal Subcommittee, Iskra Fidosova, which must prepare amendments to the State Aide Act to regulate the mechanism under which the State will be reimbursed for the funds.

The group will include experts from the Ministries of Finance, Agriculture, Economy, Transport, NGOs, and the opposition.

The amendments are to be prepared within weeks and passed at second reading in the Parliament by March 2013.

On Monday, EC issued a statement stressing that if the swaps are deemed to be State aid, Bulgaria will have to ask beneficiaries to reimburse the difference, but the procedure does not provide for sanctions against a Member State in such cases. It does, however, mandate the State to reinstate the funds immediately. EC underscored that any information about fines or sanctions is premature and speculative.

The statement in reality firmly disproved Naydenov, who a week ago declared that most likely by the end of the year EC will decide to sentence Bulgaria for illegal State assistance in the land swaps made by the previous Three-Way Coalition Cabinet.

On Tuesday, the Minister rejected any discrepancy between his words and those of the EC, saying his comments were just a hypothesis.

According to him, the Bulgarian State lost between BGN 2 B and BGN 8 B from unfavorable land swap deals in 2001-2009.

The formal stance of the Cabinet Borisov has always been that the land swap deals were criminal acts designed to benefit certain firms and individuals by the former governments, and should not be construed as deliberate State aid to private companies, which would be a breach of EU competition regulations.

GERB have reiterated on a number of occasion that the practice had been halted in 2009, and the Prosecutor's Office is probing possible cases of corruption, including against two former ministers.

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Tags: Borisov, GERB, land swaps, European Commission, Ministry of Agriculture and Foods, forests, agriculture, tourism, Nihat Kabil, swaps, forest, land, illegal, probe, prices, Miroslav Naydenov, reimburse, Iskra Fidosova, state aid, Boyko Borisov


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