The President defends business interests says leading Bulgarian banker

The President defends business interests says leading Bulgarian banker


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An interview given to Markus Bernath of Der Standardon 24 March 2013

The banker Tzvetan Vassilev is considered to be one of the most influential men in Bulgaria. In an interview with “Der Standard”, he accuses the President of Bulgaria of having close ties with a circle of local businessmen.

Der Standard: "Mafia and oligarchs" use the current political transition period in Bulgaria to seize power, claims a prominent Bulgarian political scientist. Is-he probably means you as well?

Tzvetan Vassilev:I have no reason to act against the government. Certainly not an interim government, whose aim is to calm down the people on the streets and to prepare the country for new elections. Likewise, I would have little interest in organizing protests against the government of former Prime Minister Boiko Borissov, since I have been accused of “being so close”to him.

Rosen Plevneliev, the president who appointed the caretaker government, cannot complain. But the truth is: parties, which have elected this President, are keen to take power. The problem is not that the President has friends. The problem is that he has close ties with circles around the weekly “Kapital,”with whom he had business interests in the past; and also a system of NGOs beneath, including the Open Society Institute. Ognyan Mintschev, the political scientist whom you mentioned, but also other "opinion leaders" who hide behind the facade of a democratic society supporters, defend their interests.

Der Standard: But the President has been elected by the people of Bulgaria.

Tzvetan Vassilev:Yes he was, thanks to the favor of former Prime Minister Borissov; just put Plevneliev at the head of a party, and you’ll see the result. The President represents corporate interests, not the interests of the nation. But even by saying that, I don’t mean to ever never undertake any action against the state or the government. I never did so in the past. As the majority sharholder of one the largest banks in Bulgaria and a major investor in various important areas, I am interested in stability–not in street protests. Such events may help other people like Ivo Prokopiev, not me. [NB: Mr Prokopiev is a Bulgarian entrepreneur who, among other things, leads the Economedia publishing house.]

Der Standard: You are considered as one of the most powerful people in the country. What does it mean to be powerful in Bulgaria?

Tzvetan Vassilev:The business that I run is very extensive. But is there any country in the world where major businesses are not important also for politics? I never took part in the formation of the government. However, half of the government of former Prime Minister Boiko Borissov, particularly the economic and financial part, but also the then Infrastructure Minister Plevneliev, consisted of people chosen from the same circles that I mentioned earlier.

Der Standard:The Corporate Commercial Bank (CCB) in Bulgaria is often portrayed as an unofficial "Bank of the State".

Tzvetan Vassilev: The CCB was denigrated to the European Commission for allegedly receiving preferential treatment by the State. The Commission investigated, found no evidence, and closed the case. But my opponents did their best to protract the investigation against the Bulgarian State and my bank. They are also pressing the president and the interim government to continue the attacks.

Der Standard:It seems like you are chased by the idea of circles around the Economedia publishing house.

Tzvetan Vassilev:Look, the first name proposed for nomination on the last Minister of Economy of Borisov’s government in 2009 was the one of the former Director General of Economedia, Biser Boev. His aunt is coincidentally Kristalina Georgieva, Bulgaria's EU Commissioner in Brussels, and his classmate was Simeon Djankov, the former finance minister. Eventually, Boev wasn’t appointed on the ministerial post because the public reacted. As an alternative, they chose Traitcho Traikov, a college friend of Djankov, as Economy and Energy minister. Ironically, the circles around “Kapital”and the Commissioner are now trying to part ways with the policies of the former finance minister.

Der Standard: Please, elaborate.

Tzvetan Vassilev: Their financial and economic policies failed. They haven’t managed to cope with the impact of the global financial crisis and later the euro debt crisis in Bulgaria, because the followed only a policy of austerity, without taking into consideration that the majority of the population lives at the border of poverty. It felt somehow awkward to hear the president saying at the presentation of the caretaker government: “This is a new start.”What new start? The same people are in the background!

Der Standard: When a major public tender in a strategic sector takes place in Bulgaria, it is more likely that you win it rather than lose it. How is this possible?

Tzvetan Vassilev: The financial crisis has given us more opportunities than other banks, which were conservative and reversed their activities on the Bulgarian market. When we take part in tenders, we usually make the best deal. But I am accused for everything I do. For example, for the purchase of Vivacom, one of the leaders in the telecom market. Last year, the sellers of Vivacom chose one of my companies together with VTB Capital, because we submitted the best offer for financial restructuring. You must bear in mind that the privatization of Vivacom, the former state-owned Bulgarian Telecommunications Company, was proposed in 2004 at a ridiculously low price with the mediation of Bulbrokers, an establishment of Prokopiev, and executed.

Der Standard:There is a constant criticism that your bank would stash a huge part of government funds. What of this is true?

Tzvetan Vassilev:Firstly, there is a difference between government funds and the money of public enterprises. The allegations about the alleged concentration of deposits of public enterprises –a rumor also spread from circles around Kapital –refer to funds from companies in the energy sector. There are hundreds of state-owned companies that are working in other sectors; the majority of them are not customers of Corporate Commercial Bank.

We are a bank that specializes in energy and infrastructure. We have been doing this for twelve years now. In this sector there are, even now, predominantly state-owned companies with whom we work, to whom we give credit – as well as to their employees. If we win a public company as a customer, this is the result of a public tender. Our conditions are just better. For current accounts, we pay 1.5% annual interest. In Austria, you probably get something like 0.1%. Currently, not more than 8% of our bank deposits come from state-owned companies. However, we grant them a significant number of loans.

Der Standard:What you are describing here is a struggle for power of businessmen in Bulgaria.

Tzvetan Vassilev:It is not a battle for business interests. I don’t lend these people money, I also don’t owe them. This is about business people who try to get into politics. Why does Ivo Prokopiev have also the Economedia publi usinesmen foritsher? As a tool to control interests. Why did the pharmaceutical mogul Ognyan Donev buy the newspapers of the WAZ Group in Bulgaria? Was it because they’re making so much profit? No, it’s because he wanted to use them for his own political ambitions.

Der Standard:Ognyan Donev says that he did so in order to create a counterweight to the influence that you have gained through the financing of the New Bulgarian Media Group (NBMG).

Tzvetan Vassilev:I have never used newspapers to attack competitors or other businessmen.

Der Standard: However, the media, part of NBMG, have begun to attack the president of Bulgaria.

Tzvetan Vassilev:They criticize him for serving corporate interests and not the interests of the nation. The president is not a sacred cow. He can be criticized.

Der Standard: Didnt you encourage them to do so?

Tzvetan Vassilev:How? We should not underestimate journalists. They have their opinions, which can indeed be quite different and not in accordance with the official position of a leading member of the government. I never call anyone, I don;t show up in TV 7 channel, the ownership structure of which has, by the way, changed.

Der Standard: Let us have a look at the media in Bulgaria. We have a banker who supports the NMBG, a member of parliament and his mother who own the NMBG, a large pharmaceutical company and a multi-business owner, who at times felt safer in Singapore than in Sofia. Seriously: How much media freedom could there be in these circumstances?

Tzvetan Vassilev:It’s a strange picture you are painting here! We may even have too much freedom in the media. In Bulgaria, everybody can just say anything and write without respect or regard to ethical rules. The criterion of objectivity used in this country is how aggressively media attack those in power: the government, the president. But newspapers dont have that much influence on the public opinion in Bulgaria. Television is much more important and the Internet with its news sites. The largest part of these websites belongs, incidentally, to Economedia and is overseen by the wife of the president. You know, he was also a long-time director of Economedia publishing house…

Der Standard:Would you describe yourself as an oligarch?

Tzvetan Vassilev:If you call ‘oligarch’someone who is wealthy and leads a number of business, then, ok, I’am an oligarch. But then, Bill Gates, Warren Buffet, Richard Branson and Bernard Arnault are oligarchs as well. If, however, an oligarch is defined as a businessman standing with one foot in the government and uses his political contacts for his business, then I certainly do not fit this definition.

Der Standard:Where do you stand politically?

Tzvetan Vassilev:I’m not a GERB-banker or a banker of BSP or DPS [NB: these terms refer to the main Bulgarian political parties]. For me, stability is the most important. I support any reasonable government, representing the national interests. My activities are large enough to lose a lot in the case of instability, a collapse of the currency or other such events.

Der Standard:Where is democracy in Bulgaria, almost 25 years after the fall of communism?

Tzvetan Vassilev:Thepeople are disappointed after these 24 years. They expected that everything will change for better slowly, which is not the case. Some still feel nostalgic of the communist times. The task of the politicians here, just as in Brussels, I believe, is to find ways to make more countries like Bulgaria stronger. The way out of the crisis is on strengthening the purchasing power of people. This can be accomplished mainly by using the export resources we have and by encouraging our national production.

Der Standard:What do you think about the protest movement in Bulgaria? Do you understand why these people are going out on the streets?

Tzvetan Vassilev:It all started with people who live on the border of poverty. With people who were very disappointed. As always, of course, some political parties have tried to exploit this movement, but also some criminals who want to take action against the entire political system.

Der Standard:Was it wise of Boiko Borissov to withdraw shortly before the regular elections?

Tzvetan Vassilev:He wanted to reduce the tensions on the street. Whether right or not –the elections will show. I think if he would have remained in power, there would have been be more blood spill.

Der Standard:But isnt it a bit like he escaped his political responsibilities?

Tzvetan Vassilev: It is easy to criticize someone, when you do not put yourself in his shoes. Things are perhaps a little more complex. Calming down the people on the street was probably part of his consideration. Or maybe it was part of his strategy for the coming elections.

His resignation revived the lust for power of the ‘Kapital’circle. Now we have an interim government that runs the country and which was formed by the president. But it looks as if this interim government expects to keep the power even after the elections. It would be, in fact, very difficult to form a coalition government which to be approved by the parliament. Polls show that many of the big parties have lost support, and that none of them has a chance to win an absolute majority.

Tzvetan Vassilev (53) studied economics in Sofia and Lodz; he started his career after the change of regime with investment firms and is since 2005 the majority shareholder of Corporate Commercial Bank (CCB). He also holds the majority of shares of Vivacom, one of the largest Bulgarian telecommunications companies.

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