The mistaken logic of EU financing creates problems, some of which are showing up in Bulgaria. That does not necessarily mean that Bulgaria is not to blame. Quite the opposite, corruption is all over the place, bureaucracy – devouring all funds, while the attempts of a significant number of people in our society to live off of us or of the European taxpayer are daily, persistent and continuous.
IME on European Union Funds
Macro View: The EU reports – cause for speculation
More than two years ago, when Bulgaria was still not a member of the European Union, we at the Institute for Market Economics attempted to warn the public in the country, that the effects of the expected subsidies may not be necessarily positive. At that time we could not start a serious debate, since the position not to take money, which is given for nothing, would not be popular. These funds were viewed as the means for fast and easy way to enrichment at somebody else’s expense (the European taxpayers), which is possible, but only for a very limited number of people and very often by not very legal means.
Corruption exists all over the world. This is a phenomena, which when is noticed, could be cured if the political will is present and technical means available. The reports of the European Commission and the public reaction in Bulgaria show not only that a point of intolerance has been reached, but also that there are no doubts that total and absolute corruption is present in Bulgaria at all levels.
EXAMPLE FROM BULGARIA: EU Money and the Roma inclusion
How is the EU money spent? The efforts to integrate the Roma in Bulgaria during recent years give a very good answer to this question. During the last 10-15 years a lot of State organizations, international organizations and associations have tackled this problem. All sorts of programs and projects, related to Roma people, have been financed with State, European and private money. This is gives us a very good foundation to assess how effectively the public funds have been spent.
The Distortions of EU Money
...The eventual conclusion is that there is significant proof for lasting negative effect from the structural funds on the economy. The more optimistic conclusion is that there is a need to show explicitly the positive net effects in order to be sure that we are not destroying our societies by encouraging such behavior by the administration and all possible recipients.
My money or the European money!?
During the past few years in Bulgaria there has been continuous talk about the EU money. People wake up and fall asleep with the term “put the funds to use” in their minds. The impression is created that this money is vitally important to the lives of Bulgarians – without which there would be no infrastructure, there would be no agriculture and human resources would not develop and over all everything would go to hell. However such perception is fundamentally wrong!
Alternatives to EU Money
During the past few days there has been no way not to ask the following question – to what extent is the role of the EU funds decisive for the Bulgarian economy? We could be more extreme in our assessment – do we really need of the European taxpayer’s money in order to develop our economy and to increase the standard of living of the population? In contemporary scientific literature there is no proof aid assists in economic growth and makes the people richer.
EXAMPLE FOR EUROPE: Putting to use the structural funds in Ireland
During the period 1950-1988, before the economic boom, Ireland had unsatisfactory rates of economic growth due to the combination of bad political decisions in the area of economics and ineffective government institutions. These initial conditions include low levels of quality human resources, bad physical infrastructure and low levels of investment in research and development activities, similar to those in Bulgaria.