As Bivol first wrote on January 15, 2020, a special EP mission was set up following 15 petitions by Solidarnost (Solidarity), the Association of victims of PEAs.

European Commission’s (EC) monitoring should not have been dropped

Before being elected as MEP, Cristian Terhes has had solid professional experience in the financial and corporate sectors of Romania and the United States and is well versed in the mechanisms of work of banks and credit institutions.

According to him, the problems in the lending market in Bulgaria and Romania are largely the same. “However, in Romania, the supervision of not only banks but also other financial institutions that lend money to people, is stronger to ensure that contracts do not have unfair terms,” said the Romanian MEP.

He expressed his outrage that the EC had dropped its Monitoring Mechanism on Bulgaria’s and Romania’s judiciary against the backdrop of persistent critical problems, such as unfair borrower clauses.

“The monitoring mechanism was supposed to help solve lending problems, as this situation also affects justice,” said Cristian Terhes.

He called on NGOs and the media in Bulgaria to alert the European institutions more actively. “And I would like to congratulate Bulgarian citizens for turning to the CP. This is important for all European citizens when faced with such problems and are unable to find a solution at the national level,” explained Cristian Terhes.

According to him, the problem has really reached the EP. “And as you can see, this mission was set up. We will prepare a comprehensive report on our visit that will include recommendations on what can be done, and not only by the Bulgarian authorities but also by banks.”

“We received feedback from the stakeholders and all the information we need to be able to come up with appropriate recommendations,” the Romanian MEP summed up.

“Constructive criticism”

Speaking to Bulgarian media, the Chair of the EP’s CP, Dolors Montserrat, former Minister of Health, Social Services and Equality of Spain from 2016 to 2018, declined providing details of meetings with the Bulgarian Ministers of Justice and Economy, Danail Kirilov and Emil Karanikolov, the Deputy Governor of the central bank, the Bulgarian National Bank (BNB), the Association of Banks and the Chamber of PEAs in Bulgaria.

“But I must point out that there was also room for constructive criticism from all sides. To which great attention was paid,” is how she commented on Bivol’s question about her discussions with Danail Kirilov and the Chamber of PEAs.

“It is not necessary to dwell on all the meetings that have taken place. However, to improve the situation, there needs to be more constructive self-criticism from all parties involved,” said Dolors Montserrat.

She acknowledged that “there is a certain imbalance in the relationship between creditors and borrowers in Bulgaria.” The MEP assured that the mission’s work “will continue in Brussels”, where an appropriate report on the visit to Sofia will be prepared to also include recommendations. “It will take maybe two-three months, but we will do our best to present it as quickly as possible,” said the Spanish MEP.

Montserrat guaranteed that she had received “all the information” in Sofia. “I can assure you that in these three days we almost became experts in the field of lending, we are leaving Bulgaria with a large amount of documentation on the subject,” she explained.

The MEP noted that the documentation included dozens of petitions about wrongful terms in consumer and mortgage loans, adding that the mission had evaluated the complaints and had attempted to check all of them.
Dolors Montserrat also recalled that “legislative powers are vested in the Bulgarian National Assembly but the mission would work with its colleagues to come up with recommendations to be voted on by the CP with the hope to provide solutions to Bulgarian institutions and citizens.”

The MEP also noted that the first the legislative changes introduced by the authorities (most likely the Civil Procedural Code, CPC – editor’s note) were a “reform in the right direction”.

“We have taken note of the Bulgarian government’s efforts to reduce the imbalance between creditors and borrowers, but there is still much to be desired,” concluded the MEP.

Minister Kirilov: This is an artificially created problem

According to Ivaylo Iliev, founder and Chair of Solidarnost, the meeting with the petitioners on February 25, 2020 had lasted more than three hours and the MEPs had received information about the so-called “Dark Room”.

“Since 2009, there has been a so-called “Dark Room” in the Sofia District Court with 150,000 pending court cases. This is an illegal warehouse for cases in which the judges have not served the debtor with a proceedings order so that they can defend themselves,” Ivaylo Iliev explained.

The press office of the Ministry of Justice did not announce the meeting of Minister Danail Kirilov with the MEPs. However, on February 20, 2020, he commented for the FOCUS News Agency on Solidarnost’s protests in front of his institution.

He said in the interview that he would present his position on the Consumer Rights and Debtors Directive to MEPs but admonished Bulgarian MEPs Radan Kanev, Angel Dzhambazki, Andrey Slabakov and Tsvetelina Penkova for not advocating for Bulgaria on the issue of PEAs.

“I rely on accurate judgment regarding this artificially created problem. I regret that our Bulgarian MEPs have been misled and without knowing thoroughly the legislation and the practice of its implementation, had failed to defend the Bulgarian position during the debate in the CP on September 5, 2019,” said an adamant Kirilov.
As expected, he refused to resign at Solidarnost’s demand.

“It is alleged that we have been inactive in the amendments to the CPP with regard to enforcement proceedings. In fact, the opposite is true,” the Minister stressed.

Danail Kirilov claimed that the amendments, initiated by former Ombudswoman Maya Manolova, already protect citizens from the wrongdoings of the PEAs.

“We have prepared the utmost possible balanced protection of debtors in enforcement proceedings. We have changed the notification rules, the ability to appeal acts. Now, enforcement proceedings cannot happen without the debtor being duly notified twice. First, with a notice of execution, then with a call for voluntary execution. The debtor has an opportunity to object, in which case they go into classic litigation. We have expanded the ability to appeal the actions of PEAs. We have also adjusted the PEA fees for small debts so that debtors cannot be wronged with additional fees,” said Danail Kirilov.

Iliev says the Justice Minister has accused him of attacking PEAs because he simply owed millions. According to Iliev, Kirilov intends to resolve the problem by causing public reaction to settle private affairs.

Meanwhile, more and more petitioners are joining Solidarnost, including foreign entrepreneurs from Romania and the United States, who have collided with Bulgarian PEAs.