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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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"There was [no food], but none died from hunger."

Let me again start with an old joke that was popular when Eastern Europe was still ruled by the communists. Question: What we can call a paradox? Answer: The paradox is when you have money, but there is no food to buy with it; when there is no food to buy, but your refrigerator is full; when your refrigerator is full, but you are still angry; when you are angry, but when asked to vote you would vote for the communists. (Before 1989 there were shows called elections with only one candidate).

For a person who lived during communism it would be easy to explain such set of paradoxes. For those who (fortunately) haven't passed through such unpleasant experiences let's go to our main topic. The life in the former Eastern block countries has two levels of existence - official and unofficial. This was true 10, 20 or even 30 years ago. When you meet person there who officially is unemployed, the most reasonable explanation is that s/he works in 2-3 different places and has no time for any other official job, because it is low paid. When you learn that someone can hardly survive, that means probably that s/he is trying to hide some exceptional income from the internal revenue service. There is one life for the outsiders (the state included), but there is another for the friends and relatives. It is like the Albanian house - ruins from outside and eclectic style palace inside.

Frankly speaking, if ordinary people in the East obeyed the laws, they would have died from hunger long before the end of communism. Remember the joke at the beginning of our story. Officially there was nothing in Poland's shops during the winter of 1981. There was nothing, but none died from hunger. In Romania this strict diet continued throughout the 80s. I can personally witness that in Bulgarian capital of Sofia the shops shelves were empty in the second half of the 1990. Again, the hyperinflation made the salaries ridiculous in the beginning of 1997, but none has starved. If that isn't a paradox?!

A very simple calculation shows that in average almost every Eastern European family has bought a second hand car from the West in the past 10 years. Second hand doesn't mean a car for free. In average it too costs at least $2-3000 USD. For countries like Romania such a purchase represents 2-3 years of the average family income. The paradox is obvious - the ordinary people have no money, but still have enough to buy a car.

The second hand car buying can be explained with some changes in the diet program (so to say, we eat less and we can afford it).

That is not the case when it comes to real estate properties. When you earn officially a $100 USD dollars a month, it is hard to explain how you could afford to build a house within a couple of years for $20,000 USD without bank credits or external help. Let's take two Eastern European countries, for example, to show and to prove with numbers that there couldn't be any real estate market except for the Western expatriates. Our examples will be Poland and Bulgaria.

Imagine that you are an average person, living in Warsaw, earning an average salary of $400 USD a month. You have an average family of four with two working parents. You live in a small apartment of 60 sq.meters (600 sq.feet) with your father and mother so you decide to move in a larger apartment or house. You have to choose between a property downtown or at the periphery. The first option seems too expensive ($1000 USD/sq.meter), the second - far away from the better schools (your children need a good education).

So you decide to buy something that isn't too expensive and that isn't too distant from schools. You can bet that you aren't the only one to think this way but finally you find an apartment of 80 sq.meters (800 sq.feet) for around $60,000 USD. Of course, you haven't such a big sum in cash, so you go to the bank and apply for credit. The average bank is ready to lend you as high as 80 percent of the price ($48,000 USD). The rest - $12,000 USD, you have to find yourself. If you save from your monthly income $100 USD for the apartment (that's 1/4 of your total income after taxes), you can spare this $12,000 USD within 120 months or 10 years. Of course you can't wait till then so you go to Germany and work illegally 1 or maybe 2 years.

When you collect the sum, you return to Poland (of course you don't declare the money and you must pay a bribe to the custom officers to close their eyes). Well, you have your $12,000 USD, you are happy enough to find a work with an average salary of $400 USD a month and again you go to the bank. The loan you could receive is for a period of 20 years (the longest possible) with 18 percent annual interest. The mortgage is almost equal to your whole family budget. You refuse the credit and again go to work in Germany for several years ahead. When you get the much needed $48,000 USD, you return in Poland but by then your children have grown enough and maybe have their own families.

Official statistics in Poland show a very dynamic real estate market. None tries to explain how people could afford to pay for their houses or apartments, to buy cars and still have enough money to live and grow children. This is a paradox that can be explained only if we assume that people earn much more than their official incomes (from illegal work at home or abroad).

Let's go to the other corner of the Eastern Europe, Bulgaria. Prices and salaries aren't identical with the Polish ones but the result is the same. An apartment in a similar location somewhere in Sofia could cost $25,000 USD. A 10-year monthly mortgage could mount as high as $350 USD (the average salary in the country before taxes in only $100 USD). Even well-paid state officials couldn't afford such credit because their net salaries (after the taxes) hardly exceed $350 USD. As far as ordinary Bulgarians are concerned, they can only dream of living in Poland and to have the possibility of working illegally in a rich country such as Germany. In the 90s in Bulgaria almost 100.000 houses and condominiums were built (4 for every 100 families). When in 1997 the government decided to check the incomes of the new home owners, it failed in its attempt. The reality was that none of them has previously declared his exact income. Maybe that's the main reason why until now in Bulgaria there was no precedent for putting someone in jail simply for not paying taxes. To put 4 out of every 100 persons (the richest and the most influential) in jail isn't likely.

Most other Eastern European societies fall between these two countries in the matter of prices and average salaries. If we look at the statistics there is a real estate market, some very dynamic indeed as in Poland. If we look at the prices and salaries, there couldn't be any market at all. Who can afford to buy even the smallest house in Eastern Europe? Except the foreigners, only those who don't declare incomes and don't pay taxes. Thus the real estate business couples with the local underground society. In this case the real estate agents are most frequently the people who are designated to hide the real numbers. After all the new owners want to minimize their property taxes.

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