EU financing to EU financing to Bulgarian Bulgarian economyeconomy

Spyros ArgyropoulosSpyros Argyropoulos

Latest Development in Bulgarian

Economy & Prospectiveness for CooperationThessaloniki, 9th November 2005

How far has Bulgaria How far has Bulgaria progressed along the road to progressed along the road to

Europe?Europe?

1993 Association Agreement

1995 AA enters into force

1995 Membership application

1997 Candidate status

2000 Opening negotiations

2004 Closing negotiations

2007 Membership

How does Europe assist How does Europe assist Bulgaria along the road to Bulgaria along the road to

Europe?Europe?

PHARE SAPARD ISPA Strengthening

public institutions to function effectively inside EU

Promoting convergence with EU legislation (acquis communautaire)

Promoting Economic and Social Cohesion

Accelerating sustainable agriculture and rural development

Assisting long-term adjustment of agriculture and rural areas development

Assisting long-term adjustment of agriculture and rural areas development

Assisting infrastructure investments in EU priority fields of environment and transport

Accelerating sector and policy reforms in the infrastructure sector

Financial allocations by Financial allocations by programmes 2000-2004programmes 2000-2004

0%10%20%

30%40%50%60%70%

80%90%100%

2000 2001 2002 2003 2004

PHARE SAPARD ISPA

PHARE

30% Institutional Building

70% Investment in acquis and ESC, including CBC programmes

ISPA

50% Transport

50% Environment

Phare CBC programmes in Phare CBC programmes in BulgariaBulgaria

CBC Bulgaria –SCG

(since 2004);2-4 M€/ year

CBC Bulgaria –FYROM

(since 2004);2-4 M€/ year

CBC Bulgaria –Greece

(since 1994)20 M€/ year

CBC Bulgaria –Turkey

(since 2003) 3-7 M€/ year

CBC Bulgaria –Romania

(since 1999)8 M€/ year

Increase in EU appropriations Increase in EU appropriations

for 2004-2006 for 2004-2006 ……

0

50

100

150

200

250

PHARE 203 220 237

SAPARD 68 73 73

ISPA 135 147 158

2004 (m€) 2005 (m€) 2006 (m€)

…… but less forgiving EU political but less forgiving EU political climateclimate

Bulgaria hopes to enter EU in 2007

Safety clauses that could delay the entry till 2008 concentrate on: Justice, Environment, Home affairs

October 2005 EC Monitoring Report did not spread much light on the final entry date but the final decision will be taken in 2006

Further efforts are needed to address certain shortcomings:

increase food safety; reinforce the structures

and mechanisms for participation in EU structural funds;

tackle industrial pollution;

organised crime more effectively.

From pre-accession to structural From pre-accession to structural funds (2007-2013)funds (2007-2013)

ISPA

PHARE

SAPARD

ESF, ERDF

EARDF under CAP

Cohesion Fund

STRUCTURAL FUNDS:

ESF – employment and human resources development

ERDF – productive investment and economic infrastructure

CF – transport & environment infrastructure and energy efficiency

Financial framework for Financial framework for BulgariaBulgaria 2007-2009 2007-2009

Agriculture1,552 mEUR

Structural actions 2,3 mEUR

Internal Policies 268 mEUR

Administration116 mEUR

BulgariaEC

Schengen and Cash-flow Facilities240 mEUR

Total sumTotal sum –% –% of GDPof GDP

Bulgaria, Romania (2007-2009)

as compared to EU new member states (2004-2006)

Total appropriations for commitment - % of GDP

0

5

10

15

20

25

BG RO LV LT EE SK PL MT HU CZ CY Sl

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Maximum appropriations for commitments (mEUR) % of GDP

New FDI data are also New FDI data are also

encouraging encouraging ……

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004

FDI EU accession assistance

…… but policy challenges remainsbut policy challenges remains

It is crucial that Bulgaria takes immediate and decisive action to address issues of serious concern if it is to be ready by the envisaged date of accession:

strengthen the rule of law

improving public administration and the justice system

fighting corruption effectively

OverviewOverview

Where we’ve come from lost years culminating in 1996 crisis strong performance since 1997

Where we are now strong growth despite weak world demand tight fiscal policy, some delays on structural

reform credit boom and current account deficit pose

policy challenge

Where we’re going EU accession: real and nominal convergence Preservation of currency board up to EMU Precautionary program with the IMF

For contactsFor contacts

101, G. S. Rakovski Str., Fl. 11000 Sofia / BulgariaPhone: (+359 2) 9230080Fax: (+359 2) 9230089E-mail: office@bbt.bg

BB&T Ltd. is independent management consultancy company, operating in Bulgaria and internationally.

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BB&T provide services at most stages of project cycle: identification, feasibility, operational and technical follow-up, technical advice and support, information and communication, monitoring; as well as studies and research with the emphasis on industrial and commercial development, regional and local economic development strategies and local employment initiatives.