Series:Center for the Study of Democracy - CSD Policy Briefs

CSD Policy Brief No. 10: A Painful Shift in Bulgarian Anti-Corruption Policies and Practice

CSD Policy Brief No. 10: A Painful Shift in Bulgarian Anti-Corruption Policies and Practice

Author(s): Author Not Specified / Language(s): English

Keywords: CSD; CSD Policy Briefs; Center for the Study of Democracy; corruption;

In its March 2006 annual corruption assessment report On the Eve of EU Accession: Anti-Corruption Reforms in Bulgaria the Center for the Study of Democracy emphasized that “corruption, particularly in the high echelons of power, is one of the most critical problems faced by Bulgaria on the eve of its accession” as the Bulgarian “public tolerates less corruption and is increasingly concerned by it.” Bulgaria needs to present clear evidence of results in its fight against corruption, in particular on high political level.

CSD Policy Brief No. 13: Effective Policies Targeting the Corruption – Organized Crime Nexus in Bulgaria: Closing down Duty-Free Outlets

CSD Policy Brief No. 13: Effective Policies Targeting the Corruption – Organized Crime Nexus in Bulgaria: Closing down Duty-Free Outlets

Author(s): Author Not Specified / Language(s): English

Keywords: corruption;

Duty-free trade-related smuggling of excise goods has been one of the most potent and sustainable sources of political corruption in Bulgaria for the last fifteen years. The operation of land border area outlets has been a major channel for flooding the Bulgarian market with tons of illegal cigarettes and alcohol and the sale of millions of gallons of excise-free petrol. The resulting profit, running into hundreds of millions each year, has been funding many a Bulgarian party and has become the foundation of untouchable political oligarchies. While the fortune of other illegal markets has ebbed and flowed, duty-free shops and petrol stations have enjoyed the protection of all governments since the beginning of the 1990s. Several attempts to close them down have come against the significant state-capture power of the duty-free operators. Not only have their operation not been curtailed following Bulgaria’s EU membership – as members of the Bulgarian government have insisted and pledged to do – but a law was passed granting duty-free operators the right to offset closures of their units along Bulgaria’s EU external land borders' entry routes with new ones at the EU external borders’ exit routes with Turkey, Serbia and Macedonia.

CSD Policy Brief No. 14: Criminal Justice and Law Enforcement along Bulgaria's Borders: the Impact of EU Accession

CSD Policy Brief No. 14: Criminal Justice and Law Enforcement along Bulgaria's Borders: the Impact of EU Accession

Author(s): Author Not Specified / Language(s): English

Enhanced criminal justice and improved cross-border cooperation between judicial and law enforcement authorities are essential for the EU and its Member States in order to effectively respond to the increasing threat of cross-border criminality. // The last two EU enlargements resulted in significant changes in the Union’s external borders. Some of the countries that used to have such borders (like Germany and Austria) are now neighbors to other EU Member States. Their responsibilities regarding the security at the external borders are gradually transferred to new Member States which have become the outermost countries of the Union. The duties of these countries on protecting the external borders are yet to increase substantially. // Further to Bulgaria's accession to the European Union, the country's frontiers with Turkey, Macedonia and Serbia, as well as its Black Sea border, have become external borders of the EU. Hence, border crossing-related criminal offences and customs violations no longer represent a problem of Bulgarian national security alone: they have turned into a problem of EU security. Many crimes and customs violations involve organized criminal groups and breed genuine corruption threats to customs authorities, border police, investigative police officers, and magistrates. Such acts fall within the jurisdiction of courts and prosecution offices at different levels and are inquired into by investigative police officers whose capacity still fails to match their wider responsibilities.

CSD Policy Brief No. 15: LEVELLING THE PLAYING FIELD IN BULGARIA. How Public and Private Institutions Can Partner for Effective Policies Targeting Grey Economy and Corruption

CSD Policy Brief No. 15: LEVELLING THE PLAYING FIELD IN BULGARIA. How Public and Private Institutions Can Partner for Effective Policies Targeting Grey Economy and Corruption

Author(s): Author Not Specified / Language(s): English

Keywords: Corruption; grey economy;

This paper outlines the result of the consultations, which the Center for the Study of Democracy held with representatives of business and government on the feasibility of public-private partnerships in promoting a level paying field in Bulgaria. Its findings seek to inform further discussions with Bulgarian and international stakeholders on the modalities of possible future initiatives in this area on the example of public policy on the grey economy; If the efforts of the Bulgarian government and the business community to reduce the adverse impact of grey economy on the nation’s welfare are to succeed they need to bring on board the experience from successful coalition building for good governance from the non-government sector, based on best international practices. International experience has revealed that there are no easy fixes to pervasive grey economy and corruption. This brief proposes an overview of measures undertaken thus far to tackle the grey economy in Bulgaria and outlines a possible platform for engagement of the business, NGO and government sectors for long-term partnership for leveling the paying field in the country. This platform should combine the power of the government, the efficiency of the business and the know-how and experience of the civil society in the presence of a strong outside anchor and committed partner – the European Union. Its structure should allow for a combination of broad policy guidelines with focus on specific tangible actions. It should focus on strengthening enforcement, improving public resource management and enhancing business integrity. The platform needs to start with a narrow high impact issue e.g. the use of PPPs and EU funds in infrastructure, tourism or energy. The grey economy is one of the main constraints to investment and growth in Bulgaria. Different estimates put the size of the grey economy in the country between 20 and 35% of GDP, with some sectors, reporting less than 50% of the actual value of transactions. These hidden revenues create a self-perpetuating pool of corruption payments used to secure anything from tax “breaks” to state capture. Lower tax and social security rates and increased control intensity introduced by the Bulgarian government since 2003 and continued credit-and FDI-based economic growth have reduced the share of the grey economy by some 30% between 2002 and 2008. As these measures are likely to have one-off, limited impact on the grey economy and related corruption, priority must be given to strengthening enforcement, in particular for severing grey business monopolies’ corrupt access to high-level administration and political officials.

CSD Policy Brief No. 17: Bulgaria and the European Agenda for Protection of Children on the Internet

CSD Policy Brief No. 17: БЪЛГАРИЯ И ЕВРОПЕЙСКАТА ПРОГРАМА ЗА ЗАЩИТА НА ДЕЦАТА В ИНТЕРНЕТ

Author(s): Author Not Specified / Language(s): Bulgarian

CSD Policy Brief No. 18: Better Governance for Sustainable Energy Sector of Bulgaria: Diversification and Security

CSD Policy Brief No. 18: Better Governance for Sustainable Energy Sector of Bulgaria: Diversification and Security

Author(s): Author Not Specified / Language(s): English

Energy is the lifeblood of any economy: oil, gas and electricity are critical to a functioning and growing nation. For all nations, economic and social well‐being depends on safe, affordable and dependable supplies of energy. It becomes very clear, then, that the question of energy security is not just a question of economic security, but of national security as well. // The Bulgarian energy sector is key for the future development of the country’s economy. For the past decade energy exports and imports formed on average 12% (16% in 2008) and 21% (22% in 2008) of the value of the country’s outgoing and incoming trade flows respectively1. Every fourth public procurement contract is concluded in the energy sector, making it one of the biggest taxpayers’ money spenders in the country. In 2008, in a single year, the Bulgarian government committed to energy projects, requiring budgetary investments equal in value to the whole EU funds support for the country for the current European seven‐year budget period 2007 – 2013.

CSD Policy Brief No. 19: Energy Strategy of Bulgaria 2020: a better Governance Perspective

CSD Policy Brief No. 19: Energy Strategy of Bulgaria 2020: a better Governance Perspective

Author(s): Author Not Specified / Language(s): English

Energy is a key sector for Bulgarian economy, both because of its size and because of its importance to national competitiveness. This requires decisions to be made on the basis of reliable and accessible data, broad based discussions and clearly identified strategic priorities, which rely on established practices and mechanisms for good governance. The latest strategic document at national level is the Bulgarian Energy Strategy from 2002. Without updating it, the Bulgarian government has committed in the years following its EU accession to substantial investments with long‐term impact on the energy sector, which is a vivid example of failure in good governance. Bulgaria’s membership in the European Union (EU), climate change negotiations, the financial and economic crisis and Bulgaria’s inclusion in several international investment projects have changed the conditions for the development of Bulgaria’s energy sector. These latest developments require updating of the national energy strategy and providing for better and transparent governance in the sector.

CSD Policy Brief No. 20: Policies to counter the Effects of the Economic Crisis: Hidden Economy Dynamics 2009

CSD Policy Brief No. 20: Policies to counter the Effects of the Economic Crisis: Hidden Economy Dynamics 2009

Author(s): Author Not Specified / Language(s): English

The hidden economy has been a central topic for discussion in the public space upon each amendment to the economic legislation and particularly before elections or the passing of the national budget. Nevertheless, aside from the Annual Hidden Economy Index released by the Center for the Study of Democracy and a few sporadic analyses by other non‐governmental, academic and business organizations, there is a lack of an adequate government system of ex ante and ex post impact assessment of the proposed measures to fight hidden activities of the wider economy. // The adjustments of GDP done by the National Statistical Institute aiming to include hidden economy in the system of national accounts are not made public and do not serve as a basis for decision‐making. // Thus, public debates on hidden economy become little more than displays of rhetorical skills or actually serve completely different agendas rather than the implementation of measures to curb its negative impact.

CSD Policy Brief No. 65: The Wind that Blows from the East: Russian Influence in Central and Eastern Europe

CSD Policy Brief No. 65: The Wind that Blows from the East: Russian Influence in Central and Eastern Europe

Author(s): Author Not Specified / Language(s): English

Keywords: CSD Policy Briefs; Center for the Study of Democracy; Russia; Influence; Central and Eastern Europe

The topic of Russia’s influence in Central and Eastern Europe (CEE) has grown in significance after the eruption of the Ukrainian crisis in 2013. The US and EU policy and research communities have scrambled to explain the potential scenarios, tools, and impacts of the Russian influence, as well as propose possible solutions to minimizing its negative effects on European unity. This policy brief, which summarizes the key findings from the joint study of the Center for the Study of Democracy and the Center for Strategic and International Studies (CSIS), Kremlin Playbook: Understanding Russian Influence in Central and Eastern Europe, presents a model for understanding the impact of Russia’s economic influence in Central and Eastern Europe in five case study countries (Bulgaria, Hungary, Latvia, Serbia, and Slovakia), and its relationship to the region’s general decline in governance standards. The study estimates that on average, Russia’s economic footprint in five of the most targeted by the Kremlin CEE countries has ranged from about 11 percent of the economy (in the cases of Hungary and Slovakia) to an astonishing 22 percent in Bulgaria. After 2008 the Russian leadership has aggressively deployed its resource-based resurgent economic power in combination with old time security networks and skillful use of traditional soft power appeal to exploit and further strategic vulnerabilities across the countries of Central and Eastern Europe. Russia has also cultivated an opaque network of patronage across the region that it uses to influence and direct decision-making. This web resembles a network-flow model, which we describe as an “unvirtuous circle” of Russian influence leading to “state capture.”

CSD Policy Brief No. 66: Dynamics of Conventional Crime in Bulgaria 2015 – 2016

CSD Policy Brief No. 66: Динамика на конвенционалната престъпност 2015 – 2016 г.

Author(s): Author Not Specified / Language(s): Bulgarian

Keywords: CSD Policy Briefs; Center for the Study of Democracy; Dynamics; Conventional; Crime; Bulgaria

Crime rates in 2015 continue their downward trend with a decrease of 0.4% compared to 2014 levels. It must be noted, however, that the level of reporting crime to the authorities falls compared to officially registered numbers by the MoI in 2015. This means that latent crime is on the rise, which signifies a drop in public confidence in the MoI. One of the main reason for this discrepancy are the so-called police filters, which lead to diverging levels of officially recorded conventional crimes and crimes reported by the citizenry. These are some of the results of the National Crime Survey for 2015, presented in the current publication.

CSD Policy Brief No. 67: Turkey in The Framework of the EU Energy Union: Energy Security and Governance Risks

CSD Policy Brief No. 67: Turkey in The Framework of the EU Energy Union: Energy Security and Governance Risks

Author(s): Author Not Specified / Language(s): English

Keywords: CSD Policy Briefs; Center for the Study of Democracy; Turkey; EU; Energy Union: Energy; Security; Governance; Risk

The successful creation of a European energy union will not be possible without the active involvement of Turkey. The latter is going to play a vital role as the major transit country of future alternative natural gas supply from the Caspian region and the Middle East. Similarly, Turkey will benefit from the development of the Energy Union because it can transform itself in a major energy-trading hub, Turkey’s long-term energy policy objective. The EU and Turkey also share a common objective to diminish their dependence on Russian energy imports, which could provide a necessary boost to the formal energy dialogue between the two partners in January 2016.

CSD Policy Brief No. 68: Monitoring Radicalisation and Extremism

CSD Policy Brief No. 68: Monitoring Radicalisation and Extremism

Author(s): Author Not Specified / Language(s): English

Keywords: CSD; CSD Policy Briefs; Center for the Study of Democracy; Radicalisation; Extremism; Europe;

Over the last decade, radicalisation and extremism have become issues of particular concern for Europe. New risks of Islamist and far-right radicalisation have impelled the introduction of policies, the effects of which are only now being evaluated. As radicalisation that risks escalating into violence is more amenable to prevention than repression, having the capacity to detect early warning signs and trace the spread of extremist activity over time is critical. This brief outlines a set of methodologies for monitoring the risk of radicalisation and the trends in extremism based on an integrated approach to the indicators being monitored and the institutional mechanism doing the monitoring. These methodologies are designed to equip stakeholders – both governmental and non-governmental – with a tool which fuses a broad range of informational inputs; it will enable informed formulation of prevention and counter-radicalisation policies.

CSD Policy Brief No. 69: Money Laundering in Bulgaria: State of Affairs and Policy Implications.

CSD Policy Brief No. 69: Money Laundering in Bulgaria: State of Affairs and Policy Implications.

Author(s): Author Not Specified / Language(s): English

Bulgaria remains high risk country for the initiation of money laundering schemes. The high share of informality in its economy, coupled with the low level of enforcement against corruption and organized crimes, renders the country’s financial system highly susceptible to money laundering.

CSD Policy Brief No. 70: A Roadmap for the Development of the Bulgarian Electricity Sector within the EU Until 2050.

CSD Policy Brief No. 70: A Roadmap for the Development of the Bulgarian Electricity Sector within the EU Until 2050.

Author(s): Author Not Specified / Language(s): English

Based on data and modelling used by the European Commission, three scenarios for the decarbonisation of the Bulgarian electricity sector until 2050 have been developed. These scenarios provide the model framework for policy decision-making for Bulgaria in all energy domains. The results suggest the necessity for active policy-making on a number of sensitive energy issues, often linked to entrenched special interests.

CSD Policy Brief No. 71: Assessing Russian Economic Footprint in Macedonia.

CSD Policy Brief No. 71: Assessing Russian Economic Footprint in Macedonia.

Author(s): Author Not Specified / Language(s): English

Russia’s economic footprint in Macedonia has often been perceived as non-existent at best or very limited at worst. However, a detailed assessment of the Russian presence in the country reveals a more nuanced picture, in which many of the engagement channels are indirect, including through third parties and offshore companies. The revenues of Russian companies operating in Macedonia grew fourfold from EUR 63 million in 2006 to over EUR 212 million in 2015. // Much of the Russian investment in Macedonia is channeled via third countries including through offshore havens like Cyprus and Belize, obscuring the true extent of the economic footprint. Russia has also engendered the Macedonian energy dependence by controlling the single gas route to the country – via the TransBalkan Pipeline. Gazprom charges Macedonia one of the highest gas prices in Europe and has locked in the country in a costly expansion of the natural gas network. The current policy brief underlines that though the Russian economic footprint in Macedonia has been much less pronounced than in other Western Balkan countries, there is significant potential for future growth considering Russia’s project plans in the energy sector over the next decade. The authors also note that over the last two years, Russia has skillfully exploited Macedonia’s political instability, striving to undermine the country’s Trans-Atlantic ties.

CSD Policy Brief No. 72: Assessing Russia's Economic Footprint in Serbia.

CSD Policy Brief No. 72: Assessing Russia's Economic Footprint in Serbia.

Author(s): Author Not Specified / Language(s): English

The Russian economic footprint has been deepening in some countries in the Western Balkans for at least a decade. In what is the most visible manifestation of this trend, Russian entities have gradually taken over the Serbian energy sector. Russian entities, directly or indirectly affect as much as 10 % of the economy. Notably, corporate presence measured by volume of revenues and assets controlled by Russian companies in Serbia is even larger than in Montenegro, where Russian foreign direct investments are a third of the country’s GDP. // There are two main interconnected factors in Russo-Serbian relations that have laid the foundations for Russia’s expanded power in the country. One is Russian support for Serbia’s non-recognition of Kosovo’s unilateral declaration of independence, and the second is a 2008 energy agreement that included Gazprom’s takeover of Serbia’s largest state-owned company, oil and gas firm Naftna Industrija Srbije (NIS). // The current policy brief notes that in addition to the corporate investments, Russia has used direct government-to-government loan schemes to enhance its presence in the Serbian economy. The authors also highlight that Russia has compounded its political ties with Serbia and its economic presence in the country by leveraging traditional pro-Russian, pan-Slavic, and pan-Orthodox attitudes via a series of soft power initiatives.

CSD Policy Brief No. 73: Assessing Russia's Economic Footprint in Montenegro.

CSD Policy Brief No. 73: Assessing Russia's Economic Footprint in Montenegro.

Author(s): Author Not Specified / Language(s): English

The last decade has seen a significant level of economic engagement by Russian companies and individuals in Montenegro. Vital economic ties have been sustained despite the fact that bilateral political relations worsened as this small Adriatic country stepped up its efforts to complete the NATO accession process. The deterioration of political relations between the two countries culminated in an alleged failed coup attempt in 2016 and the Russian backing of the opposition Democratic Front (DF) party. Even so, Russian investment flows never dropped below 10 % of total foreign direct investment (FDI). // The current policy brief underlines that Russia has exploited governance gaps to take advantage of lucrative privatization opportunities and to extract state subsidies in Montenegro. The authors also highlight that Russia has assertively tried to meddle in Montenegro’s domestic politics.

CSD Policy Brief No. 74: Assessing Russia's Economic Footprint in Bosnia and Herzegovina.

CSD Policy Brief No. 74: Assessing Russia's Economic Footprint in Bosnia and Herzegovina.

Author(s): Author Not Specified / Language(s): English

Russia has been one of the key political players in Bosnia and Herzegovina since the Dayton Accords brought the 1992 – 1995 war to its end. According to the peace agreement, Bosnia and Herzegovina consists of two entities – the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS) with roughly equal territories – and the Brcko District. It is in RS, the entity with a Serb majority, that Russia has gained the most traction. Russia has particularly backed RS’s opposition to the Transatlantic integration of Bosnia and Herzegovina, as well as RS secession initiatives. Many regional observers feel that the secessionist aspirations of RS could potentially lead to a new regional conflict. // The current policy brief highlights that Bosnia and Herzegovina is completely dependent on Russian gas supplies. Russian companies also control the country’s two refineries, both located in Republika Srpska. Russia has consistently been the largest foreign investor in RS and the fourth largest in Bosnia and Herzegovina, with around EUR 547 million of foreign direct investment (FDI) in the country over the 2005 – 2016 period.

CSD Policy Brief No. 77: Making Democracy Deliver in the Western Balkans. Strengthening Governance and Anticorruption,

CSD Policy Brief No. 77: Making Democracy Deliver in the Western Balkans. Strengthening Governance and Anticorruption,

Author(s): Author Not Specified / Language(s): English

In 2018 the EU and NATO and the countries from the Western Balkans have a unique chance to reinvigorate the Euro Atlantic perspective of the region. There are many areas of concern that require attention but anticorruption and good governance remain the most critical to tackling the two key risks for the Western Balkans. On the one hand, countering corruption and state capture will free the economy from the monopoly of entrenched political-economic groups and will open up space for spurring entrepreneurship and lowering unemployment. On the other hand, strengthening the rule of law and governance will improve the resilience of the region to malicious meddling from external powers intent to derailing its Euro Atlantic integration. // The current policy brief provides key policy recommendations on delivering reforms in this domain through the successful triangulation of the efforts of reformist-minded local politicians, active civil society, and supportive international partners and donors.

CSD Policy Brief No. 80: The Illicit Trade of Tobacco Products along the Balkan Route – Bulgaria, Greece, Italy and Romania.

CSD Policy Brief No. 80: The Illicit Trade of Tobacco Products along the Balkan Route – Bulgaria, Greece, Italy and Romania.

Author(s): Author Not Specified / Language(s): English

Bulgaria and Romania have long traditions in illicit tobacco trade rooted in the hardships of their transitions to market economy. Unlike them, Greece and Italy enjoyed lower levels of illicit tobacco consumption, which changed with the arrival of the global economic crisis in 2009. Thus by 2012 illicit market soared from 2.2 % up to 8.5 % in Italy and from 2 % up to 10 % in Greece. The economic crisis have also led to sharp increase in illicit tobacco consumption in Bulgaria and Romania as well. However, while Bulgaria and Italy managed to stifle the illicit market, Greece and Romania continue to face high levels of counterfeit and contraband cigarettes. // The current report examines the development of the illicit tobacco market in Bulgaria, Greece, Italy and Romania through the prism of economic risks, the political environment in the country and the region, and recent changes in the involved criminal networks and the institutional capabilities for counteraction. The publication was prepared in the framework of the study "Illegal Trade in Tobacco Products and the Balkan Route: Overcoming Institutional Gaps and Corruption" and is funded by PMI-IMPACT, a global initiative to combat illegal trade and related crimes.