Russia’s invasion in Ukraine demonstrated how corrosive capital inflows undermine Europe's fragile democracies. Before the war, the Kremlin weaponized its energy investments and activated multiple oligarchic networks across Europe to weaken resolve and support for Ukraine. Bulgaria remains one of the most vulnerable countries to corrosive capital, which compromises the country's economic security.
The European Union has already put in place a Foreign Direct Investment Screening Regulation, which is complemented by several non-binding documents, including guidelines on foreign direct investment from Russia and Belarus in relation to the sanctions adopted against both countries. Bulgaria has implemented the minimum requirements of these EU provisions, and has established a coordination mechanism with other member states. Yet, the country still lacks tools for comprehensive, effective screening of foreign direct investment (FDI) and adequate safeguards against potential abuses. The Bulgarian government urgently needs to update its investment and national security strategies and introduce a sustainable FDI screening mechanism as a key safeguard against malaign foreign influence and a further guarantee to enhance the quality of foreign investment.
To underscore the urgency of advancing economic security, CSD and the Center for International Private Enterprise (CIPE), Washington, D.C., organized a roundtable on Corrosive Capital and Investment Screening on June 6, 2023. In addition to experts from the Center, the discussion was attended by Kenneth Mеrten, US Ambassador to Bulgaria, Nikola Yankov, Managing Partner of Expat Capital, Ivan Mihaylov, CEO of the American Chamber of Commerce, Miglena Mileva, Head of Investment Policy, Ministry of Innovation and Growth, Maya Naydenova, Vice President, German-Bulgarian Chamber of Industry and Commerce, Pavel Gerensky, Director General of the Narional Customs Agency, and John Kay, Program Manager, Europe, Center for International Private Enterprise.