This is the opinion is the Greek businessman Christos Mouroutis who has been living in Bulgaria since 1999. He was born in Athens and graduated in law in Greece. In Bulgaria, he is the founder and manager of the fund and asset management ARCELAND and is the chairman of the Bulgaria Land and Property Owners Association - BULLPOA. He believes that the selective default should happen as soon as possible. Then, the government should reduce the public sector from almost 800,000 to 150,000 people, introduce a flat tax rate of 15% and undertake the recovery of the economic growth.
What made you go to Bulgaria?
I went to Bulgaria by accident in connection with a project that was linked to the development of information technologies throughout the region. There was a crisis around September 2001, if you remember, that made me change my mind – we gave up the investments in other Balkan countries and developed the project only in Bulgaria. This company was Bitex, which was active in Internet and telephone communications at that time. Its development was successful and later we sold it to another larger company. I sould say I had a good career in Greece and the USA before that. Even as I came to Bulgaria in 1999, I got into the new reality quickly and found out that Bulgaria is a very good country for investment and offers many development opportunities. Many people did not believe me, but I saw prospects.
When a country is at the bottom, there are tremendous opportunities for growth and I was sure that this is the right place for development of activities. Now after almost 12 years of activity here, I could say that my assessment was correct. In 2002, I started my investment activity in Bulgaria, which proved very successful.
It is investing in two key sectors of the economy - real estate and energy projects. Tell us more about them.
It all started with real estate. My work consisted in organizing a professional, well-structured management team, which manages funds and projects in the field of real estate. These companies operate mainly in London, in some cities in Switzerland, a few in Athens, there was no such a company in Bulgaria at that time. There are three such companies in Sofia now, but then we were the first.
From the beginning, we started to deal with large projects. We attracted strategic investors - large investment houses and hedge funds mainly from the USA. I believed in the real estate sector before its big boom and its strong growth. When the boom came, we already had established market positions and the idea proved successful. In 2010, we decided with the same team to draw our attention to energy. We made a new investment package from the foreign markets and we are currently working mainly with projects related to solar energy and photovoltaic systems and biomass. These projects are related and consistent with the plan for reduction of harmful gases in the atmosphere of the European Union - 20/2020. Therefore, some projects receive EU funding, but not in the full amount. We are planning to invest 200 million Euros in the next two years in the form of mixed capital from the private sector, banks and other financial institutions. In other words, these investments will be a combination of equity and funds from the banking sector.
As an expert in the real estate market, I would like to draw your attention to Greece and more precisely to the fact that real estate prices remained high here, despite the lack of market liquidity and lower demand. What is the reason for this in your opinion?
First, it is important to understand that there is a deeply rooted belief in Greece that real estate prices never fall – they only grow. The prices in Athens and other major cities in Greece are artificially high. The demand determines the actual prices, not the supply. Usually, a property is sold at higher prices initially, but they very rarely remain unchanged and almost never in times of crisis.
The actual transactions are always at a much lower price than the initial. For example, a seller offers an initial price of 300,000 Euros, but sells the property for 150,000 Euros finally. I am saying it because I have spoken with people who are operating on the market. Those who sell and can not find buyers either withdraw their offers or reduce their price without giving much publicity to it.
Therefore, you think that the market is regulated by itself and does not "rely" on the money from the informal economy. I mean the law, which was adopted this year that it will not be necessary to prove the origin of the money when buying the first home.
There should always be accountability for the origin of money. Whether for first, second or third property, the market can not lie on the informal economy. I am saying that as the chairman of the Land and Property Owners Association. There should be control over the origin of money.