In a few weeks, Bulgaria will officially become the 21st member of the eurozone. And while for Germans this will be another reason to feel at home in Sofia, where a number of chains remind them of Germany anyway, the enthusiasm among the locals is rather limited.
This applies not only to people, but also to business, writes the German publication "Wirtschaftsvohe". Some investments have been postponed due to the political situation, explains to the media Sonia Mikli, executive director of the German-Bulgarian Chamber of Industry and Commerce. Moreover, despite campaigns in this direction, the fear of price increases has not disappeared.
Currently, Bulgaria presents itself as a country whose economic growth is faster than the average for the eurozone, but the country continues to be divided between East and West, which is most felt in the generation gap, writes "Wirtschaftsvohe". According to Mikli, the country has enormous potential - German companies, for example, see Bulgaria as a strategic location in Eastern Europe, the expert explains. "Above all, the flat tax in Bulgaria is attractive for business," adds economist Stefan Kolev.
Record levels of trade, but also obstacles
In recent years, Germany has been Bulgaria's most important trading partner - by 2022, 3,600 German companies will be present on the Bulgarian market. Many entrepreneurs expect that Sofia's accession to the eurozone will create even better ground for development and investment. Experts suggest that joining the eurozone will increase Bulgaria's gross domestic product (GDP) by 0.7% - tourism will experience a boom, the country will also benefit from the abolition of currency conversion fees.
"Wirtschaftsvohe", however, also draws attention to corruption in Bulgaria - a problem that seriously undermines trust in politics. As a result of nepotism in the country, the share of international companies in public projects has dropped from 60 to 5 percent, the publication notes and quotes economist Krasen Stanchev, who says that the problem comes mainly from the judicial system. Brussels has long criticized Bulgaria for these problems, including for its failure to comply with international standards for combating money laundering.
Although these problems are not a direct obstacle to joining the eurozone, it is particularly important that the country's central bank is independent, the German media writes. Guntram Wolf from the Brussels think tank "Bruegel" tells the German publication that the Bulgarian National Bank is "reliable".
A more reliable destination for investment?
For Bulgaria, joining the eurozone opens the door to more investment. For Germany, Bulgaria is a very good destination for investment - Berlin has a very good reputation, and many young professionals trained in Germany return to live in their homeland and are ready to work for German companies. "The work culture in Germany and Bulgaria is similar and this makes business easy", explains Kalin Dobrev, manager of the German manufacturer "Festo", which has production in Bulgaria, to "Wirtschaftsvohe".
Another such example is SAP, which is cutting its workforce in Germany but increasing its team in Bulgaria. The director of the Bulgarian office of the German company, Radoslav Nikolov, believes that joining the eurozone will help the country's reputation on the international market and strengthen economic relations with other countries that use the common European currency. Expert Wolf agrees that this is a "positive signal for Bulgaria's reliability".
Separation from Russia's orbit?
For the European Union, the admission of an Eastern European country to the eurozone is not just a technical step, notes "Wirtschaftsvohe" - it is a signal to other countries in the region. EU Commissioner for Enlargement Marta Kos has repeatedly described the decision as geopolitical, not just economic. Because it will strengthen Bulgaria's relationship with the EU and protect it from external interference, specifically Russian interference.
According to Bulgarian lawyer Konstantin Ruskov, quoted by the German newspaper "Berliner Zeitung", it is precisely Moscow's long arm that is behind the public discontent regarding the adoption of the common European currency. However, he has other criticisms of the country's entry into the eurozone - in his opinion, the decision is more political than fiscal.