Bulgarian economy minister in sales pitch to German and French business chambers

Written by on February 17, 2015 in Business - Comments Off on Bulgarian economy minister in sales pitch to German and French business chambers

Bulgarian Economy Minister Bozhidar Lukarski has told representatives of German and French business in the country that Bulgaria is pursuing a consistent trade and foreign economic policy aimed at attracting foreign investment and creating favourable conditions for the development and strengthening the competitiveness of the country’s products and exports.

The February 17 meeting, also attended by the French and German ambassadors, took place against a background of a survey among German business people last year that showed them to be sharply critical about conditions for foreign investors in Bulgaria. Official figures also have shown a sharp decline in German investments in Bulgaria.

France’s ambassador in Sofia, Xavier Lapeyre de Cabanes, has been publicly critical of “rotten apples” in the judicial system. He used the expression in highlighting bankruptcy court action involving two Bulgarian subsidiaries of a French firm – a case that has led to the initiation of disciplinary actions in the judiciary and renewed pledges by the centre-right government that took office in November 2014 to make a serious effort about judicial reform.

The head of the German-Bulgarian Chamber of Commerce of Industry, Mitko Vassilev, told reporters on February 17 that in 2014, German investments in Bulgaria declined by 338 million euro, though he added that the decrease was not because of German companies leaving the Bulgarian market but because of a transfer of financial resources where by the loans borrowed by the parent companies had now been repaid.

Vassilev added that the figures from central Bulgarian National Bank did not reflect follow-up investments, which a number of German companies in Bulgaria had made, but only new investments.

Earlier in February, Bulgarian National Radio reported that a traditional survey among the 500 members of the German-Bulgarian business chamber for the first time last year showed sharp criticism regarding the conditions for foreign investors in Bulgaria.

Those polled pointed out to, among other things, Bulgaria’s dysfunctional administration and legal system, corruption and insufficient transparency of public procurement procedures.

Asked by BNR about the effect of the past two years of political and economic instability in Bulgaria on the business climate, Vassilev said on February 15, “The effect is not good. If we look at official data of the BNB, we would see outflow of German investors for yet another year.

“But there were also positive aspects: the tax system, the geographical location of the country, the fact it belongs to the large family of EU and Nato, and the cheap labour are all attractive to foreign investors. It is important to work together; otherwise we are going to lag behind.”

Speaking at the February 17 forum, Lukarski presented measures to improve the business environment and investment conditions to representatives of nearly 100 companies from Germany and France, according to a statement by the Economy Ministry.

After the meeting, he said that the most important thing that investors expect was a stable and predictable economic environment.

Lukarski said that after the first 100 days of the current government, all the conditions for stability governance were in place and there was the will to reform.

“Investors want stability and implementation of legal standards, which is a priority of judicial reform,” Lukarski said.

He gave an assurance that changes would be made to the Investment Promotion Act and regulatory framework for public-private partnerships.

He also presented to the meeting opportunities to participate in the Competitiveness and Innovation Operational Programme, in which French and German investors can apply for projects along with Bulgarian companies, the Economy Ministry statement said.

Regarding the marked reduction of German investment 2014, Lukarski said that this was a trend that has been observed in previous years.

Lukarski said that the settlement of the Kloesters-Cemeco case in December 2014 will boost the interest in Bulgaria on the part of German companies.

This was a reference to the settlement, approved by Bulgaria’s Parliament, by Bulgaria in response to a claim from Germany following its payment of compensation to a German company over a 2008 case in which the company withdrew from a project over the absence of an environmental impact assessment. Germany paid more than 4.1 million euro in compensation and lodged a claim against Bulgaria on the basis of a breach of the Investment Promotion Act. After negotiations, Bulgaria agreed to pay 2.09 million euro.

According to the Economy Ministry, another important issue raised at the February 17 meeting was the problem of double taxation of persons with French and Bulgarian citizenship.

Lukarski and French ambassador Xavier Lapeyre de Cabanes pledged to work to resolve this issue, the Economy Ministry said.

The President of the French-Bulgarian Chamber of Commerce Stephen Delahaye said the meeting was very fruitful and specific questions had been discussed that Lukarski answered directly, the ministry said.

lukarski german french chambers

The German-Bulgarian Chamber’s Mitko Vassilev thanked Lukarski for the meeting and expressed hope that a similar forum would be held on regular basis, according to the Economy Ministry statement. Lukarski said that in the future, similar meetings should also be organised with other ministries.

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