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Balkan countries- economic benefits and EU membership

Bulgaria, Romania, Croatia and Greece are EU member states. If all other Balkan countries join the union, the Balkans would become an attractive place for foreign investors. The economic benefits of this membership are indisputable- it means an access to the common European market, subsidies for the agricultural produce and free access to all European funds supporting the economic development of the countries from the region. The common European currency on the other hand would reduce the cost of the credit. This is a matter of survival for all small and medium-sized Balkan countries.

The Balkan countries have common problems

All Balkan states have problems regarding competitiveness. These problems are caused by bureaucracy, corruption and education. All Balkan countries were badly affected by the economic crisis and are recovering very slowly. These countries were hit by the financial turbulence due to their open economies and the crisis in their main trade partners in Western Europe. The economic crisis in the Eurozone led to a lower demand of export items and respectively reduced the export of the Balkan countries. Another major problem in this region is the high unemployment. An investors’ reflux has been registered over the recent years as well. The huge international banks which used to spend huge financial resource in the region have started to relocate their money to places where a higher economic growth is expected in the future. This led to a rapid development of the so-called shadow banking-the number of companies offering quick consumer loans with high interest rates in the region has been sharply increasing. In other words reforms are the only way to a future economic growth in these countries.

Investors treat Balkans as one region

While the Balkan countries compete with each other for new foreign investments, it became clear that the foreign companies treat the Balkan region as one. The attraction of fresh capital from Europe, the USA and Asia has been accompanied with a new trend-the number of the Balkan countries willing to invest in neighboring states is on the rise. Highest gross domestic product was produced in Greece, Romania and Bulgaria, data of the International Monetary Fund shows. It means that there is a huge difference between the economies of the Balkan countries, their markets, the taxes and the business environment there. According to statistical data, Romania, Bulgaria and Croatia have managed to attract biggest financial resource from foreign investors.

Investments of neighboring countries to Bulgaria

Bulgaria attracted biggest financial resource from Greece- EUR 3.5 billion over the past twelve years. Bulgaria’s southern neighbor is the second-biggest investor in this country. The interest of Romanian companies towards Bulgarian has been increasing as well.

Bulgarian investments in the region

The Bulgarian business became extremely active in the investments process in the Balkans. Most preferred destinations for the Bulgarian capital are Serbia, Romania and Macedonia. Over 100 companies with Bulgarian participation were registered in Romania and the Bulgarian investments there exceed EUR 50 million. Bulgarian banks own shares in financial institutions in Albania and Macedonia. Some Bulgarian insurance companies have penetrated the Romanian, Serbian and the Macedonian markets. Bulgarian pharmaceutical industry has invested money in production facilities in Serbia and the Bulgarian petrol industry operates well in Romania and Serbia. Bulgarian companies produce industrial materials in the country’s northern neighbor and Albania. A Bulgarian company for the manufacture of soft drinks also operates in Albania. Big construction companies operate successfully in Serbia and Albania. The construction of the courts of justice in Kosovo was entrusted to Bulgarian company.

Active trade in the Balkans

The Bulgarian export to Romania, Greece, Serbia, Macedonia, Croatia and Albania, is to the tune of EUR 4.2 billion. The trade balance of this country with all Balkan countries is positive. Highest exchange was registered with Romania. Greece is Bulgaria’s second-biggest trade partner. Trade with Serbia and Macedonia is much weaker. Weakest trade was marked with Croatia and Albania.

There is no such term as Balkans when speaking of power-engineering

The energy infrastructure is viewed in a broader scope- as the one of the Southeast Europe. Along with Romania and Serbia, Bulgaria is among the biggest exporters of electricity to this region. In 2020 this country is expected to export between 7 and 16 terawatts of electricity per year and place second after Hungary in this ranking. This is so, because practically Bulgaria produces electricity from all sources- from nuclear energy to biomass.

English version: Kostadin Atanasov

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