Bulgaria’s land swaps become an issue of European law

Sofia Echo – Only weeks after the disparity between Bulgarian and European Union regulations was put in the spotlight by the questioning of the alleged conflict of interest during the confirmation hearings of Bulgaria’s former commissioner-designate Roumyana Zheleva, another possible discrepancy could get more attention in the coming months.

The issue in question is the controversial land swaps carried out en masse during the tripartite coalition’s time in government. Soundly criticised by the opposition and environmentalist groups as a means to exchange land in remote areas for plots in prime locations, which often became the target of real estate developments, land swaps are now being investigated by the European Commission as a possible instance of illegal state aid.

Land swaps routinely were carried out at prices below market valuations, making them much more profitable for the beneficiaries rather than the state. A moratorium on such deals has been put in place since then.

The EC has asked Bulgaria to provide, by March 2, its arguments why the land swaps should not be considered state aid or apply for permission from the Commission for this kind of state aid. Failure to comply would trigger an infringement procedure against Bulgaria, Prime Minister Boiko Borissov said.

According to Borissov, Bulgaria could face fines of up to 1.5 billion leva if land swaps are found to be illegal state aid. Borissov, who criticised the practice during the electoral campaign, said that he did not plan to defend it to the European Commission and that one way to dodge EU sanctions would be for Parliament to undo the land swaps retroactively.

Land swaps are entirely legal under Bulgarian law, Prosecutor-General Boris Velchev said, re-iterating his earlier statements on the issue.

Borissov’s predecessor, socialist leader Sergei Stanishev, said that there were no mentions of sanctions in the European Commission letter sent to Bulgaria and that the current Government was using the issue to blacken the name of its political opponents. The swap deals themselves were not state aid, because the increased value of the land came from local administration’s decisions to allow construction on those plots, Stanishev said.

Borissov has called a meeting of the Prime Minister’s security council on February 9 to discuss the issue and possible solutions.

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