It’s all very well

15/09/2010 by Christopher Buxton

Bulgarian Finance Minister Simeon Dyankov woke up one morning with a good idea. One sure-fire way of getting rid of corruption, tax evasion and money laundering at a stroke would be to abolish large cash transactions.

Easy-peasy – with an absolute majority in Parliament – you just pass a law making it illegal to walk around with over 5000 leva in your pocket. Did I say walk around? – scratch that! – substitute drive around in your street busting 4×4.

The good idea is that everyone will use banks for their transactions – thus providing the tax collectors and police with a useful paper-trail to follow. The new law provides that anyone found with such a sum on their person will see a quarter of it confiscated. So at a stroke Dyankov has put a red cross over the steotype of fat boys in dark glasses carrying Bila bags stuffed with bank notes to pay off street runners, police informers, judges and mistresses. Ageing pop stars will no longer receive their tax free fees under the table. Everyone’s heart will now thrill to the opening of bank statements announcing the safe arrival of legal money in their accounts.

In a society in which large amounts of cash are transported in unsuitable vehicles over potholed roads, perhaps Dyankov was seeking to reduce opportunistic crime. Recently in the Rhodop village of Musachevo, gun toting gangsters made off with all the villagers’ monthly pensions, just after they had been delivered by van. Given that information about the regular movement of cash to remote villages is easily come by, such a raid would not have required much intelligent planning.

In Bulgaria awareness of imminent crime is fanned by the press and magnified by friends’ lurid stories of thumbless Gypsy pick-pockets. I remember the sick feeling in my stomach when buying our first flat in Bulgaria in the early nineties. This involved drawing a vast sum from The International Bank, then walking through open streets to the State Savings Bank where the money was counted three times before a receipt was issued. It seemed a very risky thing to do. Out in the street I looked at the world through paranoid lenses. As I clutched the bag of money under my arm, everyone in my field of vision was transformed into a potential robber. I should have been carrying a gun.

At the outset of capitalism in the nineties, honest fledgeling businessmen rattled vast distances with their trabants filled with banknotes, praying that they would not be robbed.

Since then communications between banks has improved, but payments take time and organization. Buying a car, getting insurance, buying an apartment for my mother-in-law, I have toiled through the expensive and difficult international bank transfer route, making rapid calculations in dollars, euros, levs and pounds, keeping my fingers crossed that correct amounts are landing in the right accounts. Nevertheless, this is preferable to carrying cash without body guards. But it would be even better if credit cards were accepted everywhere.

Good ideas always raise a storm of buts. The most obvious but is that a large number of Bulgarians don’t have bank accounts. Firms used to paying their employees in cash are already complaining that the system is unworkable.

More frustrating for non-Bulgarian residents is the unpredictability of credit card acceptance. Thus I can use a credit card to pay supermarket, petrol and telephone bills, but I can’t use it to pay my Car and House Insurance. Large bills have to be paid by multiple use of cash machines over days.

With the French Ambassador demanding that the Bulgarian Government appoints a Minister for Gypsies, a further interesting point arises. How will the black economy now function for this illiterate minority who depend on it?