The New Economics: the Need for Real Enforcement

This paper examines the bureaucratic constraints on growth in Bulgaria a member of the European Union. The aim of the paper is first to document these constraints with examples from small and medium size business enterprises. A second aim is to demonstrate how bureaucratic constraints, particularly the existing distribution network, contribute to the necessity of small and medium size business smuggling to remain competitive. The third aim is to put the situation in Bulgaria into the European context following the arguments of Prime Minister Cameron who has proposed “a leaner and less bureaucratic European Union.” The paper offers a solution to bureaucratic constraints; the introduction of a Uniform Commercial Code for the European Union, following the example of the Uniform Commercial Code adopted in the United States. he Uniform Commercial Code “a comprehensive code addressing most aspects of commercial law, is generally viewed as one of the most important developments in American law. Bulgaria’s Economy Minister has recognized the anti-competitive nature of business in the European Union noting that only smuggling generates any growth. He noted that “if we have to choose between [a] gray economy and no economy, Bulgaria is definitely better off having [a] gray economy.” Specific examples of the causes of the need for small and medium size business to adopt the methods of the gray economy will be documented. Specific examples of external anti-growth business competition from non-Bulgarian companies financed by European funding institutions will also be documented. The need to bypass existing legal distribution networks will also be documented. The paper will then identify the benefits of a Uniform Commercial Code for the European Union based on the experience of the Uniform Commercial Code in the United States. Such a code will provide a means of replacing existing bureaucratic constraints on business in the European Union. A Uniform Commercial Code will also provide new economics for distribution in the European Union and in this way contribute to a leaner and less bureaucratic European Union.