EU Responds about Vlahutin’s Villa, Insists It Is “Saving” Money

In response to questions of Exit regarding the recent acquisition of the official residency of EU ambassador Romana Vlahutin, spokesperson for EU Foreign Affairs and Security Policy Maja Kocijančič declared:

It is the intention of the European External Action Service (EEAS) to increase the number of owned properties, whether office buildings or residence, if it considered that it is better value for money to buy than to rent.

She added that also security issues had been taken into account.

Considering the slow-down of the EU enlargement process, in the Western Balkans and elsewhere, it seems indeed reasonable, from a financial point of view, to choose longer-term solutions such as real-estate. In fact, Kocijančič confirmed that “the EU owns residencies in 21 countries already, and is envisaging the purchase of residencies in other countries.”

When asked about the high price of Ambassador Vlahutin’s residence, €1.6 million, or €4,700 per square meter, Kocijančič responded:

[The] decision to select the Head of Delegation (HoD) residence was the conclusion of a comprehensive analysis, including a market survey and an independent expert estimate. Taking everything into account, we expect considerable net annual savings compared to the previous rental agreement.

Naturally, these net savings are only a projection into the future, which assumes that the €1.6 million residence in Rolling Hills will actually retain most its current value. It also remains unclear what the “market survey” entailed and who the “independent expert” was who provided the estimate, but it remains the case that Ambassador Vlahutin’s residence is one of the most expensive pieces of real estate ever acquired on the Albanian market.

The background of Rolling Hills

The EEAS’s new policy to acquire real estate in EU candidate member states rather than rent property makes it more vulnerable to corruption, especially in those countries where the real estate and construction markets are not primarily shaped by a free market, but rather by monopolies and oligopolies tightly linked to political interests.

The acquisition of Ambassador Vlahutin’s residence is a case in point. The luxury “gated community” Rolling Hills is developed by a company of one of the major clients of the Rama government, Samir Mane.

The same company is currently developing the Green Coast project on the Albanian Riviera in Palasa, facing accusations of falsifying property documents in order to push the luxury real-estate project forward. Recently, Gjikuria shpk, was fined five million lekë by the State Inspectorate for Water for using materials from the Palasa beach for the roadworks around the Green Coast project, causing considerable damage to the environment.

Samir Mane has been main (and also seems to be the only) businessman to profit from the new law on strategic investments, which short-tracks large-scale investments and offers lucrative tax deals. Green Coast was the first project to be classified as such in July 2016, together with Mane’s beach-side project in Gjiri i Lalzit, Vala Mar.

By acquiring its residence in the real estate project of a businessman with ties to the government that are so close, that it even seems the Council of Ministers has designed specific legislation to accommodate him, the EU has implied itself in the corrupt dynamics of the relations between Albanian politics and construction company interests.

Its decision to buy a villa in Rolling Hills has done irreparable damage to the image of the European Union in Albania and raised considerable doubts over its stance on the battle against corruption.

Update: In a follow-up email, EU spokesperson Kocijančič stated that the villa was not bought directly from Samir Mane, but from a private owner. This fact has been reflected in the article.