Dr. Zdravko Popov

Dr. Zdravko: ---

Dr. Zdravko:

Despite the favourable macroeconomic indicators gained through the last years, the global economic and financial crisis has confronted Bulgaria with some challenges, the main of which are as follows:

- decrease in the real economic growth – approximately 4 %;
- unemployment rate in 2009 – approximately 9,5 %;
- reduction in the direct foreign investments in the first six months of 2009 to 1,9 billions EUR (compared with 4 billions EUR in the same period 2008);
- considerable decline in the foreign trade turnover as a result of the shrinking markets.

Various measures and incentives are applied to attach foreign investments. Priority economic sectors for investments are: processing industry; producing electricity from renewable resources; computer technologies; education; sciences; health care etc. There are incentives for investments into the economically undeveloped regions, aiming minimizing regional disproportions and opening new job opportunities. The lowest corporate taxes in the European Union are going to be kept. The terms of the VAT restoring procedure cut. The social insurance burden gets 5 % down. The bureaucratic formalities are reducing and transparent administrative procedures are introduced. At accelerated rates, there is going a process of attaching investments through privatisations.

Dr. Zdravko:

Compared with the January 2009, Bulgaria is ready to face a gas supplying crisis far better now. There is more of the compressed gas in the reservoirs. A reverse gas-pipe connection with Greece was built. There is enough oil in the heating plants to pass to alternative fuel in the case of a potential gas crisis. As a priority, Bulgaria is engaged in connecting its gas-pipe net with such of Romania and Greece. These projects are approved by the EU and additional finances are allotted by the European Commission. Two-way connections of the national gas-pipe systems are to be built with Serbia and Turkey as well.

Recent high level meetings EU-Russia and EU-Ukraine and their outputs grant us a considerable warranty that the gas-supply crisis of the 2008/2009 will not occur again.

Dr. Zdravko: The Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) entered into force on 1st June 2007. The REACH Regulation creates a new European authority that will manage the chemical substances (European Chemicals Agency (ECHA) in Helsinki). In parallel, the Regulation introduces new requirements for the registration of the chemical substances as such and as chemicals ingredients, for providing additional information on the properties of the chemicals and on their safe use, for the implementation of measures for diminishing of risks etc. REACH introduces an extended period (11 years) for registration of both “existing” and “new” substances; substances are now described as non-phase-in substances (i.e. those not produced or marketed prior to the entry into force of REACH) and phase-in substances (those substances listed in the EINECS, or those that have been manufactured in the Community, but not placed on the Community market, in the last 15 years or the so-called “no longer polymers” of Directive 67/548). At this stage it is difficult to evaluate the positive and the negative effects on the entire chemical industry from the implementation of the REACH regulation. The Ministry of the Environment of the Republic of Bulgaria established a national information desk – the so called “REACH Helpdesk”. Its main task is to provide answers to all questions concerning the new European legislation in the field of chemicals and chemical substances. A team of experts is providing information on the content of the Regulation and on the requirements set by REACH. For further information please contact reachhelpdesk@moew.government.bg or visit www.chemicals.moew.government.bg.

Dr. Zdravko: The New Government of the Republic of Bulgaria made significant efforts to ease the entry to the market for EU foreign corporations and to make Bulgaria more attractive for foreign investors. I shall mention some of the measures for improvement of the Bulgarian business environment: 1. Reduction of the initial capital of the trade companies to 2 BGL (fulfilled); 2. Accelerated reimbursement of VAT from 620 million BGL (as of July 27, 2009) to 200 million BGL (as of today); 3. Diminution of the insurance burden by 2% in 2010 and by 1% for each of the next 3 years to the total of 5% for the mandate of the government; 4. Establishing of a centralized management of the concession activities under strict rules for control; 5. Adoption of new provisions of the Public Procurement Law aiming the abolishment of some contradictory and non-transparent procedures and of the term “small public procurements”, as well as strengthening of the role and of the authorities of the Public Procurement Agency; 6. Diminution of the tax burden through liberalization of the regulations of the product markets as a pre-condition for decreasing the level of corruption and of the influence of the groups with special interests; 7. Increasing of the grades of the investors where some of them are supported and administrated by the state and others – by the municipality; 8. Development of fund for risk capital investments and of guarantee funding fund; 9. Acceleration of the legal insolvency proceedings, simplification of the procedures and introduction of mechanisms for settlement of obligations through clearing and establishment of debt instruments market; 10. Amendments to the Law on the limitation of the administrative regulation and administrative control over the business activities aiming the introduction of transparent, unequivocal and explicit rules for the authorisation and registration regimes; 11. Control over the resources allocated to the trade banks by the Bulgarian Development Bank in order to ensure their effective use for the purposes of the business crediting.