Bulgaria in EU's Mirror SINCE 1990

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Issue 2(173)

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e-mail: [email protected] ∙ www.penkov-markov.eu ∙ telephone: (+359 2) 971 3935 executive's remarks 1

Bulgaria needs more EU

A stable government and more European integration are a must if we want to have predictable political environment in Bulgaria. “No more business as usual” sounded as the main message of the Transatlantic week in Brussels where 37 representatives from 23 AmChams exchanged views on advocacy and ways to cooperate. The 25th anniversary of the EU Single Market and Bulgaria’s 10 years of EU membership provided the chance to draw up a balance sheet. GDP has increased by nearly 70% in nominal terms during that period and, according to Euro barometer, Bulgarians are happier now than before. Some 70% of Bulgarian exports are destined for the EU; a similar percentage goes to the countries at the “fastest” EU speed – Germany, France, Italy and the Benelux.

AmCham’s view on Europe on “several speeds” is aligned with that of the current caretaker government – Bulgaria needs more integration and more EU. This will lead to better investment climate in our country. Bulgaria’s good macroeconomic performance is not sufÀ cient to attract more FDI, as high levels of corruption, problems with rule of law and law enforcement all present major impediments. For instance, economist Krassen Stanchev discusses on Page 16 Bulgaria’s structural problems related to the constitutional arrangement of the prosecutorial powers.

We are not mere observers, but also contributors to the efforts to change the status quo. Major political parties assured AmCham of signing a Memorandum of Understanding, which should enable the Chamber to pursue its key priorities outlined in the 2017 White Paper, read more on Page 4 and Page 26.

God helps those who help themselves, says an old proverb. Numerous pundits and scholars in Bulgaria have pointed out its great and unrealized potential that is still hampered by excessive bureaucracy, outdated governance structures and narrow- minded mentality. Those impediments must be addressed and removed soon if we do not want to be left behind in an unpredictable, fast changing world.

Sincerely Yours,

Alex Nestor Executive Director Board of Directors Content of the American Chamber of Commerce in Bulgaria President Ms. Krassimira Chemishanska Amgen Bulgaria First Vice-President Mr. Venislav Iotov AIG Europe Limited (Bulgaria Branch) chamber news ...... 4 Second Vice-President Mr. Sergey Koinov AG Capital standpoint Treasurer Ms. Stanislava Taneva Citibank Europe Plc, Bulgaria Branch Members Mr. Olivier Marquette AES Bulgaria Obamacare Trips Trump ...... 8 Mr. Solomon Passy Atlantic Club Bulgaria %<&+5,6723+(5.$5$'-29 Mr. Plamen Zhechev Cisco Systems Bulgaria Mr. Iravan Hira Hewlett Packard Enterprise Bulgaria cover story Ms. Iva Todorova IBM Bulgaria Mr. Petar Ivanov Individual Member Bulgaria in EU’s Mirror...... 10 Ms. Zlatina Ruseva-Savova Individual member %<0$5,1$769(7.29$ Mr. Stoyan Ivanov The Coca-Cola Company Bulgaria Ex-Officio Member Ms. Maria Galindo Senior Commercial Officer, interview U.S. Embassy Acting EU, Bulgaria: Executive Director Mr. Alex Nestor Trading With the Richer 3XEOLVKHU Makes You Richer ...... 16 $PHULFDQ&KDPEHURI&RPPHUFHLQ%XOJDULD cover story %XVLQHVV3DUN6RILD0ODGRVW$UHD %XLOGLQJ)ORRU6RILD%XOJDULD No More “Business as Usual” ...... 20 7HO %<,5,1$%$&+(9$ )D[ HPDLODPFKDP#DPFKDPEJ ZZZDPFKDPEJ

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innovation members 3M Bulgaria EOOD . AA KRES EOOD . AbbVie EOOD . Abrites . Accedia . Actavis Bulgaria EAD Sensata Technologies . Adecco Bulgaria Ltd. . ADM Bulgaria Trading EOOD . Advance International Transport EOOD . AES Corporation . AFA OOD . AGORA-IN Ltd. . AIG Europe Limited (Bulgaria Branch) . AIMS Opens New Testing Human Capital . Albena AD . Alcomet AD . Alcon Bulgaria EOOD . ALD Automotive OOD . All Channels Communication . Alliance One Tobacco Bulgaria . Allied Pickfords Bulgaria . America for Bulgaria Foundation . American College of Sofia . American English Academy . American Research Facility in Bulgaria...... 31 Center in Sofia . American University in Bulgaria (AUBG) . Amgen Bulgaria EOOD . Amway amcham events Romania Marketing Srl. . Anglo-American School of Sofia . AON Bulgaria . Apis Europe JSC . APOLO Ltd. . Architect Nikolay Mihaylov Galabov . Architectural Agency Kadinovi Bros LTD . Arexim Engineering . Ashtrom International Ltd. . Association Srednogorie Copper Industrial Cluster . Astra Winter Sport Weekend Offers Ski, Zeneca Bulgaria EOOD . AT Engineering 2000 Ltd. . Atlantic Club Bulgaria . Atos IT Solutions and Services EOOD . Attica Eva AD . August Research . Auto Bavaria Ltd. . Auxionize Jsc . AVAir Bowling...... 32 Ltd. . AVON Cosmetics Bulgaria . AW-Tronics LLC . Axway Bulgaria EOOD . Baker Tilly Bulgaria . Balkan Star Automotive EOOD . Ballistic Cell Ltd. . Baxter Bulgaria EOOD . BG Radio . BICA facts and figures International Ltd. . BLVD Ltd. . BMG Ltd. . BMW Vertriebs GmbH - Branch Bulgaria . BNP Paribas S.A. - Sofia Branch . Bojinov & Bojinov . BOYANOV & Co. . Braykov's Legal Office . British American Tobacco Bulgaria . Brown-Forman Bulgaria Ltd. . Bulgarian Charities Aid Foundation Positive Expectations in (BCAF) . Bulgarian Executive Search Association . Bulgarian International Television . Bulgarian Property Developments EOOD . Bulgarian Tennis Federation . Bulgarian-American Commission for Testing Time – Educational Exchange Fulbright . Bulgarian-American Credit Bank . BulPros Consulting JSC . Bulstrad Life Vienna Insurance Group . Business Intellect Ltd. . Business Park Sofia EOOD . C3i Deloitte CFO Survey ...... 33 Europe EOOD . CAD R&D Centre Progress Ltd. . Castello Precast OOD . Center for the Study of Democracy . CEZ Bulgaria EAD . Chaos Software ltd. . Cheque Dejeuner Bulgaria Ltd. . advice corner CheckPoint Cardio . Cibank JSC . Cisco Systems Bulgaria . Citibank Europe Plc, Bulgaria Branch . Cleves . CMS Cameron McKenna LLP - Bulgaria Branch . Coca-Cola Enterprises Services New Regime Amends Bulgaria EOOD . Coca-Cola HBC Bulgaria AD . Coface Bulgaria Credit Management Services EOOD . COLLIERS International Bulgaria . Comverse Bulgaria . Congress Engineering Ltd. . Contitrans Special Pledges M Ltd. . ContourGlobal Maritsa East 3 AD . Curtis / Balkan Ltd. . DA Travel Ltd. . Danailov, Drenski, ...... 34 Nedelchev & Co. . Delchev & Partners Law Firm . Deloitte Bulgaria EOOD . denkstatt Bulgaria %<9(/<$1$+5,6729$3(1.290$5.29 OOD . Dentsu Aegis Network Bulgaria OOD . Deutsche Bank AG . Devin AD . DHL Express 3$571(56 Bulgaria Ltd. . Diamed Ltd. . Dimitrov, Petrov & Co. . Djingov, Gouginski, Kyutchukov, & Velichkov . Dobrev & Lyutskanov Law Firm . Dr. Greenberg Medical Center . Drujba Glassworks SA . Dundee Precious Metals Inc. . DuPont Bulgaria EOOD . Economedia . EcoPack Bulgaria AD . Edenred Exchange Rates Clauses Are Matter Bulgaria . Ekoterm Proekt EAD . Ekotoi - Service Ltd. . Ekzotika EOOD . EL-A-Project Ltd. . Eldrive . Electron Progress EAD . Eli Lilly and Company . Eltrak Bulgaria Ltd. . eMAG . EMC of Thorough Consideration Computer Systems Austria GmbH . Emerson Process Management . EnergoService AD ...... 35 Engineeringservice Sofia Ltd. . Enterprise Communications Group OOD . EOS Matrix Ltd. . EPAM %<7=9(7(/,1$',0,7529$$77251(<$7/$: Systems Bulgaria . EQE Control OOD . Ernst & Young Bulgaria EOOD . ESRI Bulgaria Ltd. . *(25*,(972'2529 &2/$:2)),&(6 Eurobank Bulgaria . European Bank for Reconstruction and Development (EBRD) . European Trade Center EOOD . EVS Translations Bulgaria . Expat Capital . Experian Bulgaria EAD . FairPlay International . Fama Consulting OOD . Flying Cargo Bulgaria Ltd. - Licensee of FedEx . Force Delta cradle Ltd. . Forton AD . Foundation Glob@l Libraries - Bulgaria . Founders Foundation . Fox Networks Group Bulgaria EOOD . Galardo Real Estate . Garitage Investment Management EOOD . Gasstroymontaj Jsc . General Electric International . Georgiev, Todorov & Co. . Geostroy AD . Construction – Geotechmin OOD . Geotrading AD . GfK Bulgaria, Market Research Institute EOOD . Gi Group . GIFTA . Grand Hotel Sofia . GSK . GTC Bulgaria . Gugushev & Partners Law Office . Harley- Laggard Doomed to Change...... 36 Davidson Sofia . Helios Power Jsc . Hewlett-Packard Enterprise . Hilton Sofia . Holzindustrie Schweighofer . Honeywell EOOD . Hotel Marinela Sofia . HP Inc Bulgaria EOOD . Hydroenergy %<&+$,.$&+5,6729$ Company JSC . IBM Bulgaria . ICAP Bulgaria JSC . IDC Bulgaria . Ideal Standard - Vidima AD . IIA Bulgaria . Imperial Tobacco Bulgaria EOOD . Industrial Holding Bulgaria . Ingram Micro SSC EMEA EOOD . InterConsult Bulgaria Ltd. . Interlang Ltd. . International Legal Advice center - ILAC . Intertek BA . Intracom Bulgaria EAD . Investbank JSC . Investor BG AD . IP Consulting Ltd. . Janev & Janev . Japan Tobacco International Bulgaria . Jobs.bg EOOD . JobTiger Ltd. . Johnson & Johnson Bulgaria EOOD . Junior Achievement Bulgaria . KAI Group . Kalamaris Group . Kambourov & Partners Attorneys at Law . Kamenitza AD . Katilin Popov Enforcement Officers . Kempinski Hotel Grand Arena Bansko . Kinstellar . Kolcheva, Smilenov, Koev and Partners Law Firm . KPMG Bulgaria OOD . LANDMARK Property Management AD . Law Firm McGregor & Partners . Lexim Sofia Co. Ltd. . Lindner Immobilien Management EOOD . Lirex BG Ltd. . M3 Communications Group, Inc. Hill+Knowlton Strategies Partner . Maria Vranovska, MD, MBA . Mars Incorporated Bulgaria EOOD . Marsh LLC. . MBL| Part of the CBRE Affiliate Network . Medical Center AmeriMed . Megatron EAD . Mellon Bulgaria EAD . Merck Sharp & Dohme Bulgaria . MetLife Europe Ltd. - Bulgaria Branch . Microsoft Bulgaria . Miltech Ltd. . Minstroy Holding Jsc . Mnemonica . Mobiltel EAD . Monbat Plc. . Mondelez Europe Services GMBH - Bulgaria branch . Moten Sport . Moto-Pfohe Ltd. . Mr. Alex Nestor . Mr. David Hampson . Mr. Jean Talmon . Mr. Kalin Kostov . Mr. Nikolay Ouzounov . Ms. Kalinka Kovatcheva . Ms. Margarita Radeva, CPA . MTAC . Municipal Bank Plc . Musala Soft AD . Mylan EOOD . National Network for Children . NDB Ltd. . Nemetschek Bulgaria . NEXTDOOR Ltd. . Novacon Bulgaria Ltd. . Novotel Sofia . Oiltanking . On Bulgaria Ltd. . Oracle East Central Europe Limited - Branch Bulgaria . Orak Group Europe Ltd. . Orbit Ltd. . Panchim Ltd. . PANDA - IP Ltd. . pCloud . Pedersen & Partners . Penev LLP . Penkov, Markov & Partners . Petar Ivanov . Pfizer Luxembourg SARL Branch Bulgaria . Philip Morris Bulgaria EOOD . Philips Bulgaria Ltd. . PPD Bulgaria EOOD . Premier Luxury Courage to Build Cause ...... 39 Mountain Resort . Premier Tours Ltd. . Prestige 96 AD . Provident Financial Bulgaria Ltd. . PSG Payroll Services Ltd. . PwC Bulgaria . Quintiles Bulgaria Ltd. . Radisson Blu Grand Hotel . Raiffeisen Investment Bulgaria EOOD . Raiffeisenbank Bulgaria EAD . Red Devil Catering Plc . new members ...... 40 Refan Bulgaria Ltd. . Regus Bulgaria Ltd. . Renault Nissan Bulgaria SRL . Right Rental Ltd. . RSM BX Ltd. . S&T Bulgaria EOOD . Sanofi - Aventis Bulgaria EOOD . Santa Fe Relocation Services Fox Networks Group Bulgaria EOOD . SAP . Sb Accounting and Consulting . ScaleFocus . Schenker EOOD . Schneider Electric Bulgaria . SECTRON . Sensata Technologies Bulgaria EOOD . Shell Bulgaria EAD . Sherita M Software Group Ltd. . Siemens EOOD . Siemens Healthcare EOOD . SIENIT Holding . Silver Ridge Power . Sitel Bulgaria EOOD . Sodexo Pass Bulgaria EOOD . Sofia Airport Center EAD . Sofia Hotel Balkan . V+O Communication Sofita Translation Agency . Software Group . Sogelife Bulgaria IJSC . Sopharma AD . Sopharma Trading JSC . Sportal.bg JSC . Stanton Chase International Bulgaria . Stefan Dimitrov, Norman Realestate Co. Ltd. . Sterling Serviced Office Group . Sunfoods Bulgaria EOOD - Development Licensee of McDonald’s in Bulgaria . Sutherland Global Services Bulgaria EOOD . Synchron-S OOD . Tavex EOOD . TBI Bank EAD . Techceramic-M . TechnoLogica EAD . Telelink EAD . Telenor Business Connect MagazineLVDSULPDU\IRUXPIRUSROLWLFDO Bulgaria . TELUS International Europe . The Coca-Cola Company Bulgaria . Titan Zlatna Panega DQGHFRQRPLFDQDO\VHVQHZVYLHZSRLQWVDVZHOODVIRUWKH Cement . TMF Services EOOD . Tocheva & Mandazhieva Law Office . Uber Bulgaria EOOD . UniCredit Bulbank . UniCredit Leasing EAD . Unimasters Logistics Plc . 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Chamber News

ronment and contributing to the overall competitiveness and prosperity of the country are among the key objectives of the Chamber. Based on the feedback from our member-companies, the Paper identiÀ ed the following areas of primary focus to achieve the above goals: investment promotion and innovation; tax policy; public procurement and public- private partnerships; digital economy and society; capital market development; and energy policy.

Human Capital Development AmCham Bulgaria recognizes the strong link between human capital and eco- From left: Alex Nestor, 2017 White Paper Outlines Key nomic growth and our Human Capital AmCham executive di- Development recommendations focus rector, Sergey Koinov, Areas for Improved Business on three key areas which will contribute AmCham vice-pres- Environment ident, Iva Todorova, to better qualiÀ ed, more effective, and board member and Dr. AmCham Bulgaria published 2017 healthier workforce. These areas are Krassimira Chem- White Paper in March by sending the education, healthcare, and labor policy. ishanska, AmCham document to the members and present- In the area of education, AmCham recom- president presented ing it to the media. The Paper marks White Paper to media. mends stronger collaboration between only the beginning of AmCham active educational institutions and the business involvement in the improvement of community and customization of educa- the economic and business climate in tional curricula to reÁ ect business needs; Bulgaria. The White Paper contains stra- provision of life-long learning trainee- tegic recommendations to the next gov- ships to adapt the workforce to jobs in ernment with focus on three key areas demand; and introduction of digital-skills aiming to promote economic growth, in- and soft-skills courses to improve the vestments and employment: Sustainable employability of young graduates. Media raised issues Economic and Business Environment; relating to improve- Human Capital Development; and Rule Rule of Law and Law Enforcement ments in investment of Law and Law Enforcement. climate at the ofÀ cial AmCham Bulgaria acknowledges the launch of 2017 White important step made with the changes Paper on March 6, Sustainable Economic and Business to the Constitution and the Judiciary 2017 at the BTA press Environment Act introduced in 2015 and 2016 and club. Promoting sustainable business envi- considers these changes as the beginning of a process to achieve a fully- Á edged judicial reform thus overcoming a major barrier to economic growth in the country. In order to complete this reform process and have a positive social and economic impact, we recommend the following: full independence of the judiciary; transparency and accountability of the prosecution; specialization and qualiÀ cations of judges; and introduction of e-justice. For the full text of the White Paper go to www.amcham.bg 5

Chamber Events

AmCham Talks Better Business European Union is besieged by a daunt- Environment with Political ing array of simultaneous challenges. Parties To exchange views on advocacy and ways to cooperate, AmCham EU AmCham Bulgaria Board of Directors welcomed 37 representatives from 23 and Executive Director Alex Nestor had AmChams across Europe in March. This a series of meetings with representatives year's Brussels BrieÀ ng focused on the of the major political parties in Bulgaria Single Market and how to communicate during the last three months. The meet- its beneÀ ts at the member state level. ings were part of the Chamber initiative Moreover, the Transatlantic Week on to further communicate recommenda- March 8-10, 2017 put at focus the ongo- tions and measures for better business ing challenges: the future of EU and environment in line with AmCham’s European values, transatlantic trade, the 2017 White Paper, namely for sustaina- United States under a Trump adminis- ble economic and business environment, tration, Brexit, digital single market and human capital development, rule of law more. Two highlights of the program and judicial reform. The White Paper included the launch of The Transatlantic presented on March 6 is the voice of Economy 2017, the annual survey of AmCham business as it is based on the jobs, investment and trade between the valuable feedback from our member- EU and the US, and the Transatlantic companies. Conference. Read more on page 26 Read more on page 20 No More “Business as Usual” Sensata Technologies Opens “We live in unpredictable times and New Testing Facility in Bulgaria nothing is as it used to be.” Sensata Technologies Holding N.V., The above phrase has been taken from (NYSE:ST) one of the world’s leading AmCham EU Transatlantic Economy suppliers of sensing, electrical protec- 2017 annual survey. “Brexit” and the tion, control and power management election of Donald Trump, an anti-es- solutions, announced the opening of its tablishment economic nationalist, as the largest global testing facility in SoÀ a, 45th president of the United States, has Bulgaria in March. rocked the very foundation of the trans- Read more on page 31 atlantic partnership at a time when the

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See Them in SoÀ a – Unless you Have Tickets for Canada The global phenomenon TED is coming to SoÀ a for 3 nights with a guaranteed “WOW!” effect

Serena Williams and Gary Kasparov are coming to SoÀ a. On the big screen any- way. The two ultimate stars are part of the TED Conference at the end of April in Vancouver, which will also be broad- cast via satellite in cinemas around the world, Bulgaria included. And seen as the $8500-and-up tickets for the week- long event in Canada have been sold out since the fall of 2016, the best alternative is to see it on the big screen, exclusively in Cine Grand, SoÀ a Ring Mall.

On April 25th, 26th and 30th audiences will meet futurists, scientists, celebri- ties – both on and off screen. Three different events within one week will include excellent networking opportunities, high-end cocktail reception, live performances and brief talks during the reception and, of course, the live satellite screening of TED.

On April 25th 2017 (Tuesday) cinema audiences will get an exclusive look in- side the opening night of TED, featuring world-renowned speakers: productivity guru Tim Ferriss, world champion and chess master Garry Kasparov, cyber- space analyst Laura Galante and others. Also including inventor and dancer Huang Yi and musical band OK Go.

On April 26th 2017 (Wednesday) we will think about what we would do to make the world a better place, if we had $1 million to do it. Dr. Raj Punjabi who is this year’s winner of the TED hu- manitarian award will share with us his vision. This session also includes tennis goddess Serena Williams and journalist Gayle King.

On April 30th 2017 (Sunday) join us for a curated event created exclusively for cinema audiences. It will include highlights of the most “Wow!” moments of the week-long TED2017: The Future You – as seen by the lucky few who paid $8500 for a conference ticket.

standpoint 8

Obamacare Trips Trump Negotiator-in-chief, GOP fail to deliver health care reform bill

the board; ditto for a number of Re- publican governors who worried that a loss of federal subsidies will hurt their constituencies. The non-partisan Con- gressional Budget OfÀ ce estimated that some 24 million may lose medical insurance under the proposed law. Many ordinary Americans pressured their congressmen in town halls and via di- EPA/OLIVIER DOULIERY / POOL DOULIERY EPA/OLIVIER rect communication with their ofÀ ces; to them, the changes in the health care arrangement seemed poorly thought out and hasty. The dislike against the American Health Care Act (AHCA) was universal. The GOP had seven years to come up with a viable plan, yet the lawmakers and the White House spent only about 17 days working on such a complex document, which was U.S. President Donald By Christopher Karadjov J. Trump (C), House sufÀ cient neither to prepare a strong Speaker Paul Ryan (L), bill, nor to iron out disagreements. The Obamacare got to live another day after and U.S. Vice Presi- pushback within the Republican ranks the health care bill dubbed “Ryancare” dent Mike Pence (R) made gathering the requisite number of walk down the steps of (as in “Paul Ryan, the House majority House votes unlikely and a win in the the U.S. Capitol after leader”) got pulled abruptly before a attending the Friends Senate impossible. of Ireland Luncheon vote in the House of Representatives on at the U.S. Capitol in March 24, 2017. Washington, DC. The Democrats, of course, were up in arms, too. They pointed out the danger That was a massive failure of the of millions losing their health insur- GOP’s lawmaking machine, which was ance, and the rest receiving subpar expected to sail more or less smoothly coverage: no support for maternity now with the White House and Con- leave, mental health, emergency room gress held by the same party. Instead, visits and prescriptions, along with the the inability to pass the promised likelihood that insurers may hike the “repeal and replace” of the much-ma- premiums dramatically next year. The ligned Obamacare exposed the Repub- Democrats also emphasized that the licans’ À ssures. bill was giving some $600 billion in tax breaks to the richest Americans over President Donald Trump – for whom the next decade. this was a major campaign promise – reportedly lashed at his own staff for When it was adopted in 2010, Obamac- “not pushing it” aggressively enough, are was viewed even by its most ardent before unleashing Tweeter invectives proponents as a Á awed but ultimately against the so-called Freedom Caucus needed attempt at reforming the ailing – an assortment of 29 conservatives (all U.S. health care. It boasted both suc- former Tea Party Republicans) in the cesses (halving the number of unin- House. They disliked the proposed Ry- sured Americans, allowing those with ancare for its perceived À scal proÁ igacy pre-existing conditions to get coverage, on par with Obamacare. GOP moder- keeping young people on their parents’ ates, for their part, feared a backlash policies longer), and failures (limiting in their districts because the new bill plan choices in some places, increasing was expected to hit their voters across standpoint 9

premiums in others, pissing off those disparities. who had to pay the penalty for not being insured, adding to the budget Americans are lagging behind their deÀ cit). counterparts in most developed countries in key healthcare metrics – from Democrats and Republicans have bit- longevity to chronic disease to child terly argued about everything Obamac- mortality. They incur tremendous are; they agreed only that the health- À nancial uncertainty as two-thirds of care status quo could not last for much all personal bankruptcies are caused longer. by excessive medical bills. Millions of Americans are still uninsured, and tens Indeed so. of millions are underinsured – that is, having health plans that will give them unacceptably high deductibles and out- of-pocket expenses. Small businesses are forced to lay off employees because of inability to pay up beneÀ ts – almost always related to medical insurance –

EPA/JIM LO SCALZO LO EPA/JIM and larger companies are saddled with tremendous extra cost on a workforce that largely depends on its jobs to provide for a safety net in case of illness or accident.

Truth be told, the health care sector has been among the fastest growing in the past decade. These jobs, however, are mostly in support of an ever-increasing bureaucracy and needlessly inÁ ated costs that are simply becoming unbear- Republican Speaker A recent report by the OECD noted: able for patients, doctors, employers of the House from Wisconsin Paul Ryan “High health care spending has far- and public À nances alike. speaks about the Re- reaching consequences in the U.S. publican health care economy, contributing to wage stagna- In February, Trump notori- bill in the U.S. Capitol tion, personal bankruptcy, and budget ously said, “Who knew health care is in Washington, DC, March 16, 2017. Ryan deÀ cits, and creating a competitive so complex?” This remark predictably also said he does not disadvantage relative to other nations.” drew derisive comments by pundits. believe U.S. President After the bill failed in the Congress, the Trump's claims that A bypass surgery goes for $75,000 in White House and GOP leaders doubled president Obama wire- tapped him. the United States, including the hospi- down with some hapless pronounce- tal stay. In the Netherlands the compa- ments that were intended to leave the rable expense is $15,000, in Germany impression that a new – and improved about $30,000. All told, the United – health care law was right around the States spends around $9,000 per capita corner. on health-related costs, while in the runner-ups, Norway and Switzerland, Do not hold your breath. the price tag is about $6,000 (in Germa- ny and France it is around $4,000, with an OECD median of around $3,500). Americans have to pay up on average three to four times more out of pocket for medical visits than most Europeans (except the Swiss) and put up with fewer doctors and hospitals per capita. The United States also leads the world in terms of public spending on health care, but has little to show for such cover story 10

Bulgaria in EU’s Mirror

The European Single Market is not just a mantra for this country’s economic prosperity. The big winners are students, travelers and the companies that have ventured to seek new markets or investors Does reality obey prescriptions dressed in legal attire? Are the so-called four freedoms of the European Single Market – the movement of people, goods, capital and services – already a fact? Twenty-À ve years ago, in 1992, the then president of the European Commission Jacques Delors said that one could not just “fall in love” with the single market. And one of the fathers of European integration, Robert Schuman, prophesied that Europe would Á ag without free exchange of resources, products and workforce. Are such concerns justiÀ ed today, a quarter of a century later? By Marina Tsvetkova capital to move freely in the world's largest economy – our half-billion con- Adapting the single market might well sumers are served by 30 million busi- be a never-ending task, since new eco- nesses generating 14 trillion Euro – we nomic, social and technological develop- all beneÀ t from more choice and lower ments appear every day in Europe, says prices. For our companies it means new Michel Barnier, European Commission- business opportunities; for our citizens, er for Internal Market and Services. the chance to live, work and study wherever they want. It is the single The single market of the EU is a terri- market that has created growth and jobs tory without internal borders where by giving European citizens, businesses people, goods, services and capital can and consumers opportunities that did move freely. When it was launched in not exist 25 years ago, says the President 1992 it was open to 345 million people of the European Commission Jean- in 12 EU countries. Today it is the key Claude Juncker. economic driver of the EU and includes more than 500 million people in 28 Of course, the development of that mar- member states. ket is a never-ending process. It needs to respond to a constantly changing By allowing people, services, goods and world where the economic, social and

Average summary index of Single Market integration across EU Member States: 1995 – 2015

Source: London Economics based on Eurostat and European Commission. Note: The labels EU-15, EU-25, EU-27 and EU-28 refer to the number of Member States included in the EU-wide aggregate during the years shown. cover story 11

Impact of integration

demographic changes, the challenges tic product was on the rise for another and restrictions, the new technologies, consecutive year. Data show that for 10 as well as the exhaustion of the natural years Bulgaria’s GDP has increased rap- resources and climate change are shap- idly: from 56 billion Leva to more than ing new political thinking. 88 billion Leva. Ten years ago per-capita GDP was 41% of the EU average and in Bulgaria: Ten of 25 2015 it reached 47%.

Bulgaria is celebrating the 25th anni- The number of people at risk has fallen versary of the European Single Market too. Some 60% of Bulgarians were in on the eve of its 10th anniversary of that category in 2007 and in 2015 their joining the EU. But the À reworks give share was 41.3%. Wages have also rise to many questions. increased. Over the past decade the Have Bulgarians become minimum wage has risen from 180 Leva Ten years wealthier for this period of to 460 Leva per month. The average time and what are the main wage in Bulgaria at the end of 2016 in EU made advantages of EU member- stood at 941 Leva and is expected to rise ship and the four freedoms some 5-9% this year. For comparison, Bulgarians happier respectively? the average wage in 2007 was about 400 Leva. Data and everyday ob- servations show that the people who The minimum pension in Bulgaria in beneÀ ted the most from Bulgaria’s 2007 was 92.23 Leva. In 2016 it was membership are the more mobile ones: already 161 Leva and a hike by 1.6% is students, travelers and the companies envisaged in 2017. that have ventured to seek new markets or investors. Catching up with the EU in terms of incomes has been slow, however, espe- Improved stability, better cially in the period immediately following the 2009 crisis. After 10 years of EU À nancial results and more membership income (GDP) at purchas- optimism ing power parity, i.e. by taking into account the differences in the standard These in short are the beneÀ ts for Bul- of living, has increased from 38% to just garia from its participation in the EU 47% of the EU average. Individual con- single market and from EU membership sumption is 53% of that of EU-28. respectively. Statistics abound with facts supporting that claim. For instance, Bulgarians are happier today than they Bulgaria’s economic growth in 2016 were a decade ago, shows a survey of was 3.4% - one of the highest rates on Eurobarometer. Only 36% of the Bul- the Old Continent – and gross domes- garians interviewed in 2007 said they cover story 12

The Single Market can deliver more

were satisÀ ed with their life; the share are directed to agriculture and regional increased to 51% in the fall of 2016. policy (the cohesion and structural Eurobarometer’s surveys also show that funds). Their aim is to achieve better Bulgarians have a relatively high conÀ - economic and social cohesion between dence in the EU and its institutions: 49% the member states by providing more today compared with 33% 10 years ago. support to the poorer nations. That is one of the highest conÀ dence rates in the region. Local economists are unanimous that

For the 2007-2014 program period Bul- EU funds are Bulgaria’s major garia received 15 billion Euro, net of the beneÀ t contributions for EU membership, and a lot of infrastructure projects were car- as they have helped foster internal ried out. More than 22,000 growth. Without that money we would young people beneÀ ted not have had even the present mod- from the Erasmus student EU funds est growth, the Bulgarian Industrial exchange program. Association (BIA) says. Many Bulgar- are directed to ians have found a job abroad, received Bulgaria pays regularly its good payment and returned a large EU membership fee at the agriculture and part of the money back to Bulgaria. At beginning of each year. the same time that deprived the local From 2007 until 2014 it regional policy market of workforce. Prices in Bulgaria contributed a total of 6.53 have neared those in the EU but labor billion Leva, i.e. 816 million payment is still well behind EU’s, BIA’s Leva a year. The average annual pay- analysts sum up. ment for 2015-17 is expected to be about 960 million Leva. The dynamics of the export of goods and services as a percent of GDP in the In 2015 Bulgaria paid 424 million Euro 2011-2014 period are also interesting. to the general EU budget and received Bulgaria is ranked 11th in the EU in over six times more: 2.73 billion Euro. relative share of goods and services with The general EU budget for that year the enviable 65.1% of GDP, which places amounted to 130.1 billion Euro. By 2014 it ahead of Germany, Italy, France and Bulgaria had received more than 8.5 bil- the United Kingdom. The data are pro- lion Euro and in 2014 it received another vided by the World Bank and cover the 2.255 billion Euro, i.e. a total of 13.5 whole world, where Bulgaria occupies billion Euro, the European Commis- the 27th position. sion’s À nancial report for 2015 shows. The budget for the 2014-2020 period It is hardly surprising that is smaller than the previous long-term budget. By tradition almost all resources cover story 13

63.9% of the export of goods As a relative share, the export of goods in 2016 was destined to EU since 2013 has remained steadily above countries. 50% of GDP. The export of all categories of goods has multiplied for the past 20 years with energy and investment In 2016 Bulgaria’s export to the EU in- goods exports surging the most: more creased 7.2% on 2015 and amounted to than nine times. 31.153 billion Leva. The Balkan countries are a key trade partner of Bulgaria Besides the purely statistical data that too and export to Asia is also growing. show the beneÀ cial impact of the EU single market on Bulgaria, there are Bulgaria’s main trade partners are also a series of indirect effects. A lot of Germany, Italy, Romania, Greece and companies invest in Bulgaria and that France, which account for 63.8% of the makes this country increasingly attrac- total export to EU member states. The tive for other Europeans as a destination export of materials and energy resourc- for residence or doing business. es contributes the most to the overall growth, followed by the export of con- Bulgaria is next to last sumer and investment goods. Non-ferrous metals and oil products top the list in the EU in terms of and it should be noted that through the digitalization years these two groups have been constantly competing for the À rst place. The Bulgaria has progressed in the enhance- strongest increase in 2015 was registered ment of its broadband infrastructure by furniture and household equipment and in open data developments. How- (more than 16 times) and spare parts ever, its low performance in digital and equipment (more than 13 times); skills, digitization of businesses and of the export of machinery (high-value- public services are acting as a brake to added goods) also saw a substantial rise the further development of Bulgaria's of more than 8 times. digital economy and society, the Euro- pean Commission says. Bulgaria’s export jumped from 3.7 billion Euro in 1999 to 23.2 billion Euro Of the À ve monitored indicators, Bul- in 2015 with a decrease observed only garia has the worst results in terms of in the crisis year of 2009, as well as a digital skills. The survey shows that minimum drop in 2014 (most probably more and more Bulgarians are taking up due to the lower prices of materials). mobile broadband subscriptions and the share of fast broadband subscriptions continues to increase. The price of À xed broadband connections remains rela- One to one: tively high. The availability of spectrum *'3KDVLQFUHDVHGE\QHDUO\LQQRPLQDOWHUPVLQ\HDUV for electronic communication is one of DQGSUREDEO\E\DWFRQVWDQWSULFHVLQ the lowest in the EU.

'XULQJWKHSUHDFFHVVLRQSHULRGDQGLQWKH¿UVW\HDUVRI(8PHP More than half (58%) of Bulgarians EHUVKLS%XOJDULD¶VIRUHLJQWUDGHUHODWLRQVGHYHORSHGIDVWHUWKDQWKH are connected online but two-thirds of HFRQRP\DVDZKROH7KHHFRQRP\LVJURZLQJPRUHDQGPRUHRSHQ citizens do not have basic digital skills ZLWKDOOSRVLWLYHDQGQHJDWLYHFRQVHTXHQFHVFRPLQJIURPWKDW and the number of Science, Technol- ogy, Engineering and Mathematics $VXVWDLQDEOHXQIDYRUDEOHIHDWXUHRI%XOJDULD¶VIRUHLJQWUDGHLVWKH graduates has not increased, despite SUHYDLOLQJVKDUHRIUDZPDWHULDOVDQGHQHUJ\UHVRXUFHV%XOJDULDLV OHVVSUHVHQWHGLQJOREDOWUDGHZLWKFRQVXPHUDQGLQYHVWPHQWJRRGV growing demand by the labor market. The survey shows that Bulgarians are 7KH(8LVDSULRULW\PDUNHWIRU%XOJDULD7KH(XURSHDQFRXQWULHV intensive internet users when it comes DFFRXQWIRURIWKHH[SRUWDQGKDOIRIWKHLPSRUW7KHLUVKDUHLV to making video calls and using social SDUWLFXODUO\ODUJHLQFRQVXPHUJRRGVPRUHWKDQ%LODWHUDOWUDGH networks but, on average, they engage ZLWK*HUPDQ\ZKLFKLVRQHRI%XOJDULD¶VWUDGLWLRQDOWUDGHSDUWQHUV in online activities much less than other KDVWKHODUJHVWYROXPH RIWKHWRWDO Europeans. cover story 14

2014 and 2015 but they were far from -HDQ&ODXGH-XQFNHU3UHVLGHQWRIWKH(XURSHDQ&RPPLVVLRQ millions (24,000 and 25,000 Bulgarian ³(XURSHKDVQRVKRUWDJHRIWDO emigrants respectively). HQWDQGLQQRYDWLRQ1HZEXVL QHVVLGHDVQHHGDELJHQRXJK An alternative measure is the number of PDUNHWDQGVLPSOHUXOHVWKDWJLYH European health cards, which are issued FODULW\DQGVXSSRUWMacedonia), 0DQ\RIXVGUHDPRIVWDUWLQJRXURZQEXVLQHVVEXWQHYHUWDNHWKH including at least 50,000 seasonal work- ¿UVWVWHS7KHQHZFROODERUDWLYHHFRQRP\ZLOOFKDQJHWKDWORZEDU ers. Other assessments set the number at ULHUVWRHQWU\ZLOODOORZSHRSOHWHVWWKHLULGHDVZLWKVPDOOHUULVN7KH 350,000. Greece does not provide ofÀ cial SRWHQWLDOIRUQHZVHUYLFHVDQGSURGXFWVLVHQGOHVV%XWSROLF\PDN information to Eurostat, so the numbers HUVQHHGWRSXWWKHULJKWUXOHVLQSODFHVWULNLQJDEDODQFHEHWZHHQ are speculative. FRPPHUFLDOIUHHGRPDQGFRQVXPHUSURWHFWLRQ´ Different estimations show the number of Bulgarians in Spain is above 200,000 Bulgaria has not yet closed the gap and most of them settled there right af- when it comes to business digitalization. ter Bulgaria joined the EU. That number In e-commerce, small and medium- may be smaller already. Eurostat data sized enterprises rarely use electronic show that the number of Spanish citi- sales channels and their turnover form zens of Bulgarian origin has fallen from online sales is the lowest in the EU. 147,000 to 126,000 in 2015. Although Bulgaria has progressed in the provision unemployment in Spain remains high, of online public services thanks to the a relatively small part of the people developments in open data, where it has return to Bulgaria and in the last few become one of the trendsetters in the years there has been a migration shift to EU. Nevertheless, citizens are not using Germany. e-government services as much as other Europeans do. The number of Bulgarians arriving in Germany has increased ten-fold, exceed- Bulgarians and the Single ing 226,000 in 2016, ofÀ cial German data Market show. According to 2016 data of the Federal Labor Agency, 73,000 of them are on social assistance. That is going to The biggest change has occurred for stop soon since Germany, like the EU Bulgarians working or studying in the as a whole, is planning to tighten the EU. They are close to 1.1 million people, requirements for social assistance and including children and students, but the other social programs for foreigners. numbers are not certain. Foreign Minis- try’s estimates show that there are some Some 100,000 Bulgarians are supposed 2 million Bulgarians abroad but they are to live in Great Britain and as many in not in the EU only. The National Statisti- Italy. The ofÀ cial data show smaller cal Institute only has external migration numbers but it is a well known fact that data after 2012 and only for people who the UK Independence Party questions have changed their present address with the ofÀ cial statistics concerning the one abroad. They increased rapidly in arrivals of Bulgarians and Romanians cover story 15

due to the larger num- in BNB’s statistics (in addition to mis- ber of national insurance takes and omissions), those remittances Bulgarians numbers issued. One of the do not seem to justify the exaggerated reasons for the discrepancy headlines about the contribution of Bul- abroad in principle is the people garians working abroad. Those remit- who reside there but do not tances are undoubtedly crucial for their transferred work, as well as the tempo- families, many of whom live in poor rary workers (up to three regions, but it requires a more careful 5 billion Euro months’ stay). assessment to see if the beneÀ ts com- pensate the loss of economic potential Besides, unofÀ cial data show that some (connected with the workforce). 10,000 young people go to study in Eu- ropean universities every year – mainly Experts and economists, as well as the in Great Britain, Germany and the Bulgarian political elite, say that Netherlands. SoÀ a will strive for more OfÀ cial statistics are provided by the presence in the Community Bulgarian National Bank and they show in the medium term. That is mainly a two-fold increase in the connected with Bulgaria’s upcoming money transfers made by presidency of the Council of the Euro- Bulgarians working abroad. pean Union in two years. Bulgaria still has a lot to do in Europe to achieve a The total amount transferred for a real functioning single market without period of ten years is about 5 billion physical and digital barriers to busi- Euro but that À gure does not include the nesses and citizens. The free movement money brought in as cash through the of goods, people, services and capital is Pope Francis posing one of the most distinguishing features in the Vatican City’s borders. Sistine Chapel of the EU for each and every citizen. It with the leaders of That is a substantial amount; however, helps Bulgarians to more easily study EU countries and the annual transfers make up just 1.3% abroad and exchange professional institutions in March experience and fosters investment and 2017 on the 60th of the GDP produced in the country. anniversary of signing Even if we take into account the trans- business. Those advantages of member- the Treaty of Rome. fers that are not declared and reÁ ected ship should not be underestimated. EPA/L'OSSERVATORE ROMANO HANDOUT ROMANO EPA/L'OSSERVATORE interview 16

EU, Bulgaria: Trading With the Richer Makes You Richer Bulgaria can have political weight but hardly any economic impact on maintaining the Single Market

gle market – the cornerstone of .UDVVHQ6WDQFKHY3K' prosperity in Europe for the past LVWKHERDUGFKDLUPDQɚQG 25 years – still remains too frag- FɨIRXQGHURIWKH,QVWLWXWH mented and insufÀ ciently devel- IRU0DUNHW(FRQRPLFV oped in areas that are crucial for %XOJDULD¶V¿UVWLQGHSHQG HQWIUHHPDUNHWWKLQNWKDQN future economic growth. What KHLVDIRUPHUPHP measures do the EU leaders need EHUDQGFRPPLWWHHFKDLU to take to ensure there are more PDQRIWKH&RQVWLWXWLRQDO visible results and better inte- $VVHPEO\ RQH gration? RIWKHPRVWTXRWHG%XOJDU LDQREVHUYHUV6WDQFKHY Protectionism has been the global LVDODXUHDWHRIWKH%HVW fashion since 2014, but it is least ,QGLYLGXDO&RXQWU\$QDO\VW employed by the EU. The total level DZDUGIRUE\(XURPRQH\QRPLQHHRI%XOJDULD¶V0U(FRQRP\ DZDUGDVZHOODVODXUHDWHRI%XOJDULD V*RYHUQPHQW3UL]H of customs and non-customs barriers IRU2XWVWDQGLQJ&RQWULEXWLRQWR'HPRFUDF\DQG&LYLO6RFLHW\ here is lower than in North America. 7HPSOHWRQ$ZDUGDV,0('LUHFWRUDQG*HRUJH9DVVLOHY¶V Therefore, the trade agreements with )XQG3UL]HIRU,QGLYLGXDO&RQWULEXWLRQWRWKH6SLULWRI/LEHUW\LQ the North-American countries are %XOJDULDIRU+HKDVEHHQDSULQFLSDOGUDIWHURIDQXPEHURI more favorable for the EU. One of the UHIRUPVIURPFHQWUDOSODQQLQJWRPDUNHWHFRQRP\GXULQJ%XOJDULD¶V strangest political phenomena is the WUDQVLWLRQ rejection of those agreements by some vocal European politicians and parties. Mr. Stanchev, is the European Legislators here have an ideological Single Market an idea or real- attitude only towards some foods and ity today, a quarter of a century technologies, e.g., GMOs and shale since it was established? gas production. That last thing is sure to die out – À rst in the other countries It is deÀ nitely not just an idea. In 2015 and then in Bulgaria. trade turnover (goods plus services) within the Union amounted to 4.6 The single market is far from perfect trillion Euro, i.e. 28% of GDP for the mainly in the area of services. To some same year. Internal trade within the extent that is natural, as national sup- Union does not hamper the improve- pliers are sometimes to be preferred. ment of the trade balance with the rest Such is the case in construction. As of the world, which showed a sur- concerns banking services, the situ- plus in 2015. Between 2005 and 2008 ation is slowly improving: supervi- deÀ cit existed, then the balance started sion is difÀ cult, regulations are often improving and in 2015 trade turnover changed and contract execution (espe- increased by 1.5 trillion Euro. The cially enforcement) is different in the EU is the largest trader in the world. different states. Some national regu- The volume of turnover with China is lations, e.g. food taxes, also hamper almost the same, but export prevails. trade. The United States has the same volume of trade, yet it has a trade deÀ cit. With respect to Bulgaria’s place in the European Single Market, Businesses in Europe say that what are the direct economic some European governments beneÀ ts for businesses and the cannot understand why the sin- state? interview 17

is more important for Bulgarian citi- That market is more interesting for the zens and companies as a market and new member states. Since 2003 the an- not the opposite. nual increase in their exports to other EU countries has been above 11% Here is another graph by the same (which is Bulgaria’s rate), and some colleague. countries like Lithuania for instance have seen a rise of 17%. Bulgaria has It shows that Russia for instance is as increased its export four times for the important for Bulgaria in terms of ex- period, and only Romania and Poland port as the Czech Republic, Macedonia have outperformed it by this indicator. and the United States. (The difference is that these countries do not corrupt The following graph by my colleague the political circles in Bulgaria with Metodi Tsanov from Infograph shows useless projects of state-owned com- very well what has happened with panies.) Bulgaria’s export. (We should remem- ber that export growth comes with Can an economy of Bulgaria’s growth in employment, incomes and scale have a more sensible im- money in circulation.) pact on the European market? Has enough been done in this The general rule saying that when direction by the governments you trade with the richer you become and businesses? richer holds true for Bulgaria.

Bulgarian export of goods by destination (1999-2015) Million Euro

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Let’s even take the West Balkans. Since Bulgaria can have the same politi- the EU signed a free-trade agreement cal weight as the other countries in with the West-Balkan countries in 2001 maintaining the market. I do not think (reafÀ rmed every À ve years) imports it can have the same impact in terms from former Yugoslavia and Albania of trade, although there are signiÀ - have risen À ve to seven times, and cant achievements on a sector level. 80% of the income in those countries is In the area of pneumatic components due to trade. the Bulgarian unit of Germany’s Festo is one of the most efÀ cient in In the light of EU’s GDP of 16.5 trillion the world. That holds true for many Euro, Bulgaria’s export to member local afÀ liates of foreign companies states is below 0.9%. As is the case like Lufthansa Technik, Aurubis, EMI. with the other Balkan states, the Union Chelopech is the largest and cleanest- interview 18

Size of export of goods in 2015 by destination, top 20 markets Million Euro

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operating gold mine in Europe. Bul- too. Budget discipline in the Eurozone garia is the world’s largest producer of is a devil’s thing. In terms of breaches climbing walls, second in automotive of the budget deÀ cit requirements components (including electronics) alone the ranking is the following: and fourth in bicycles. Yulian Popov Greece has 17 breaches (an 18th one is recently wrote about very likely), Portugal that ranking. In the has 15, France, 12, À eld of non-ferrous the United Kingdom, metals, KTsM Group Bulgaria 11, Italy, 9, Spain, 8, of Plovdiv, which Germany 7. Added 25 years ago I was has to keep the to this is the govern- urged to shut down ment debt, which is for excessive pollu- current monetary about 88% on the av- tion (at that time I erage (and likely to chaired the respec- regime as long as go up due to Italy). tive parliamentary If such dangers arise committee), is now possible here – and there is one of the best en- the threat of revoca- terprises in the EU tion of the currency (although small on a European scale). board – Bulgaria had better be in the Eurozone. There will be no change in What changes do you expect af- prices, the access to loans will cheapen ter Bulgaria joins the Eurozone? for both businesses and the govern- When is the right time, that is, ment, although the latter may be quite when is it economically and dangerous. À nancially reasonable to adopt the Euro? Will Bulgaria beneÀ t Does the tax system in Bulgaria from that? need to be reformed concerning either direct or indirect taxa- There is not much choice. It will be tion? There are temptations in no small feat for Bulgaria to keep the the political platforms towards current monetary regime for as long changes in the taxation system. as possible while trying to meet the Doesn’t that pose a risk to the membership requirements - and until competitiveness of labor and the the Euro area starts fulÀ lling them, economy as a whole? interview 19

The ad valorem tax can be improved, higher incomes in North America and e.g., by waiving the tax on dividend, Europe. As a matter of fact, they keep proÀ t, the patent tax and the special protectionism at a more bearable level. treatment of sole proprietors. The Otherwise trade practices like Ali Baba changes promoted during this year’s will destroy protectionism much faster election campaign will have two cer- than the opponents of CETA and TTIP tain effects: less budget revenue and can imagine. a budget deÀ cit in the short term and smaller investment stim- The Eurosceptics forecast a uli and more taxes in the division of the EU countries Security longer term, that is, budget into center and periphery, see deÀ cits and government a two-speed Europe, and so on of property debts again. Some ideas for because of the large imbalances changes are more danger- among the different member and contracts, ous and stupid than others. states. Such scenarios contradict the idea of unity. What are the lack of court Can we expect any car- prospects, especially from the dinal changes in the EU viewpoint of Bulgaria? independence after Brexit? How should Bulgaria and the local I just answered some of these ques- are our major economy react to protect tions. I do not think that the EU as- themselves or gain from sessment of the so-called imbalances imbalances that process? has some relevance to Bulgaria – it simply misses the most important The former government problems. They are connected with took good advantage of one of Brexit’s the security of property and contracts. effects: it was able to take low-interest All negative rankings of Bulgaria are loans and Á y to security on the sover- a consequence of the constitutional eign debt markets, which allowed it to form of the prosecution and the politi- pay back its old debts and accumulate cal phenomenon of Peevski. The most a reserve for À nes and contingency glaring example is that since 2013 costs. The West-Balkan governments Bulgaria has performed worse than did not manage to do that. Zimbabwe in terms of court independence. The European Union is no longer the same after June 23, 2016. There are two trends or political sentiments: one is towards a union with more taxation and quasi-taxation, i.e., regula- tory competition; the other is towards a closer union. The second prevails for now, including through Junker’s invitation to member states to consider the À ve scenarios he proposed. Those scenarios are actually two.

In what direction can we expect the European single market to develop?

Centralization and protectionism, if they happen, will have a high social price, but they will only be a transi- tion to further liberalization. TTIP and ǿǳȀǮ are necessary but modest steps towards improving the situation and ensuring more competitiveness and cover story 20

No More “Business as Usual”

rather small with assets totaling just $4.7 billion in 2015, according to estimates. U.S. afÀ liates in Bulgaria employed an estimated 10,241 workers in 2015, a consid- erable rise since 2014, placing Bulgaria 6th among the EU13 in terms of employment. The United States imported approximately $600 million worth of goods from Bulgaria in 2015, accounting for just 1.6% of Bulgaria’s total exports; the percentage rises to just 4.6% when intra-EU trade is excluded from the total, down from a high of 14.4% in 2001. Imports from the United States are also rather small, totaling just $268 million in 2015, only 2.5% of Bulgaria’s extra-EU imports.

Brexit and the UK-US Trade

The United Kingdom and EU are critical Policy issues in By Irina Bacheva economic partners for the United States. healthcare in the EU, SoÀ a-Brussels-SoÀ a transport, energy and In 2015 the United States exported climate were the most To exchange views on advocacy and ways $123.5 billion in goods and services to discussed topics at the United Kingdom, and imported AmCham-s meetings. to cooperate, AmCham EU welcomed 37 representatives from 23 AmChams across $111.5 billion worth of British goods Europe in March. This year's Brussels and services. The United States is UK’s BrieÀ ng focused on the Single Market largest export destination after the EU. and how to communicate its beneÀ ts at U.S.-UK trade is signiÀ cant. But the real the member state level. Moreover, the driver of the British-American economy Transatlantic Week on March 8-10, 2017 is investment. put at focus the ongoing challenges: the future of EU and European values, trans- In 2015, U.S. foreign direct investment atlantic trade, the United States under in the United Kingdom totaled a record a Trump administration, Brexit, digital $593.0 billion, and UK foreign direct single market and more. Two highlights investment in the United States totaled of the program included the launch of $483.8 billion. Estimated sales of Ameri- The Transatlantic Economy 2017, the can afÀ liates in the UK and British af- annual survey* of jobs, investment and À liates in the United States totaled more trade between the EU and the US, and the than $1.3 trillion. The UK accounted for Transatlantic Conference. 22% of overall global U.S. assets outside the United States. The transatlantic economy generates $5.5 trillion in total commercial sales A View from the United a year and employs up to 15 million workers in mutually “on-shored” jobs Kingdom: Sir Simon Fraser, on both sides of the Atlantic, showed Former Head of UK Foreign the survey. OfÀ ce & Diplomatic Service

Bulgaria and the United States The Brexit negotiation process must not become a choice between the EU and the America’s investment base in Bulgaria is UK and therefore political animosity will cover story 21

not beneÀ t the process. Negotiating a free $184.2 billion in digitally deliver- trade agreement with the United States able services to Europe and imported is not going to be fast – you can get a fast $113.2 billion from Europe. U.S. ex- deal or a good deal but not both. Busi- ports of digitally deliverable services ness cannot wait for the political agenda to Europe were more than double the to play out to make decisions; they need U.S. trade with Latin America and to align their timelines with political almost double the U.S. trade with the ones. This is easier for large companies to entire Asia-PaciÀ c region. ICT-enabled do, much harder for SMEs. services trade represented 56% of all EU services exports to non-EU coun- Frederica Mogherini, High tries and 52% of all services imports Representative of the EU for from non-EU countries. Foreign Affairs and Security Policy, Vice President of the The Transatlantic Economy 2017 study shows that the transatlantic economic European Commission relationship generates close to 5.2 trillion Euro in total commercial sales Europe needs to focus on its strengths a year and employs up to 15 million and achievements, many of which are workers on both sides of the Atlantic. built upon strong transatlantic coopera- The United States and Europe are each tion over the past 70 years; the business other’s main source of foreign direct community has a key role to play in the investment. Europe has attracted over future direction that the EU, US and 58.5% of total U.S. global investment UK will take. The EU remains the most since 2010, more than in any previous attractive market and largest source of decade. investment in the world even without the UK. The decision to leave will have *Source: Transatlantic Economy 2017, tougher consequences for the United Annual Survey of Jobs, Trade and Susan Danger, CEO Kingdom than the EU. Investment between the United States of the AmCham EU, welcomed over 100 and Europe, Center for Transatlantic decision makers and The Transatlantic Digital Relations, The Johns Hopkins Univer- business leaders Economy sity. across Europe at the Transatlantic Confer- ence. In 2015 the United States exported cover story 22

EU Is About Rules Brexit hides unknowns but it is also an alarm clock for Europeans

At the same time the EU is just 7% of the global population but it generates more than 20% of the world’s GDP and ac- counts for 25% of global trade. The EU also allocates 50% social payments to its citizens. In order to be able to preserve all that, there is one requirement: we have to maintain a competitive economy and a single market and expand that market to other countries in the world like Canada, Japan and New Zealand. The European Commission is currently discussing such bilateral free-trade agreements between the EU and some 20 or 30 countries in the world. Such agreements have been prepared with North Korea, Vietnam and Singapore. Some of them are causing By Andrey Kovatchev, MEP big debate, as was the case with Canada, while others are adopted without much The European Union has been faced with discussion, e.g. the one with Vietnam. As serious challenges for quite a long time concerns the Canadian agreement, it be- and the challenges have increased in the came the object of many lies and manipu- past two years. Some of them are the lations from certain circles. result of external factors: pressure from south and southeast due to the hot con- Some analysts believe that the so-called Á icts in the Middle East and the problems Brexit may even have a positive impact in Africa; from east, due to Kremlin’s on the rest of the EU by consolidating it policy; from west, due to the changes in around the single currency and around Washington following the presidential economic policies for building the sin- election. That has given rise to movements gle market, e.g. in the digital area. Some in the member states that try to manipu- À nancial institutions may move their late citizens’ legitimate fears of migration headquarters from London to Frankfurt – and gain political dividends by putting or elsewhere in the EU. The question is EU’s unity at stake. what price Great Britain is ready to pay to leave the union. Prime Minister Theresa Therefore the White Paper on the future May seems to be on a course for a hard of the EU, which will be discussed until Brexit, where everything will have to be the end of the year, puts the question of negotiated anew. That will make London what we are going to do. Shall Europe a third party without agreements with be just a single market for trade in goods the EU and its access to EU’s markets and and services but without political and services will have to be negotiated again economic coordination? Or shall it be a through a new UK-EU agreement. Or very strong, fast and efÀ cient political probably another solution will be found to union responding to the changing word? keep Great Britain’s access to the market And no matter how unpopular the term in exchange for certain obligations to the “European federalism” is today, move to EU, the way Norway pays the EU for its a more united EU? access to the single market.

There are a lot of options between a com- Brexit is like an alarm clock for many mon market and a federation. In some people, reminding them that the EU we so policies cooperation is deeper, in others much like to criticize is not a given thing only some of the countries participate. and is not eternal. And that it is not very cover story 23

wise to eliminate it – as were the signals No country in the European Single sent at the beginning of the presidential Market can cope better by itself in global election in Austria for instance. Do we competition than in cooperation with the really want it? For 2000 years on our others. When we sign agreements like that continent there have been wars every 20 with Canada, as a democratic community or 30 years, especially in the 20th century. we should set the global standards for Young Europeans should know that countries like India, Brazil, China and peace, cooperation and the single market Russia. Therefore I believe that the bigger in Europe are not given forever – we have loser from Brexit will be Great Britain, un- to cater for them and build on them. That less it keeps its access to the single market. is the right thing to do rather than invest The leaving of the EU by Great Britain, in short-lived nationalistic and populist which has always been an obstacle to the “successes” of one party or another at creation of common European defense, the expense of lasting European coopera- will now encourage a shared European tion. If it fails, the consequences will be defense and intelligence capacity, external devastating. It is good for our continent to border defense and common migration be united. Former Belgian prime minister policy. Paul-Henri Spaak says that there are only small countries in Europe. But some of The single market still stands on sustain- the small countries have not realized that ability, stability and transparency but it yet… Even Germany is small on a global also stands on the rule of law, on rules. scale. We should not forget that 50 times The EU is mainly about rules. No matter Luxembourg makes one Germany and how hard some people are trying today 50 times Germany makes one China. In to present the continent’s democracy in a order to preserve the competitiveness of negative light, it is attractive. Why would European goods and services, the growth otherwise millions of human beings con- of GDP and jobs we have to invest in co- tinue striving for Europe as a promised operation, research and development. land. Single Market Follows EU’s Ups and Downs Brexit will make the Eurozone a weightier topic

By Ivaylo KalÀ n*

European integration was created around EU’s foundation: the European Single Market. The Treaties of Rome of 60 years ago were the basis of cooperation among the warring countries in World War II. It started with united efforts in the area of economy – the opening of the borders and the creation of a common market for goods, capital and movement of people. That break- through of the EU in post-war time paid by allowing Europe to build the largest economy in the world. So the development of the Single Market is a founding principle that the EU needs to follow.

This said, with economic and especially technical development the Single Mar- cover story 24

ket is no longer common in areas The EU is changing and passing achieved with the budget. that are new, e.g., the digital area. through periods of glory, upsurge Less than 10% of e-commerce and crisis. I am optimistic: there Talking about the Single Market, in the EU is transborder trade. is no trend towards the EU fall- there is a battle in many Europe- Electronic services and trade ing into a self-destruction crisis an countries on the topic of spec- usually take place within state and returning to the national trum policy. That concerns the borders. Due to the segmented states. However, euroskepticism frequency resource that needs to market there are more than 400 is growing, as a result of which be allocated to ensure that there telecommunications companies Great Britain is leaving the EU. is one and the same frequency in Europe. The European Com- If the EU does not change, that for high-speed internet through- mission has suggested measures will mean its immune system is out Europe. Those frequencies to remove the barriers among not working. It is a question of have to be free, synchronized member states. vitality for it to and granted on a concession That explains À nd a way and basis to telecoms to provide that the reduction EU's immune solve its prob- connectivity. So when people in roaming lems. The White move across countries they can pricing, as system is put to Paper on the use the 4G service, although we well as data future of the EU already talk about the superfast portability. the test and I am does not name 5G internet. That will give busi- the problems. nesses resource. The European In many areas an optimist about The EU is vital Commission has started pursuing of develop- enough but it is the policy of “budget focused on ment in the its vitality starting to raise results” in order to see the effect separate overexpecta- of each spent Euro. countries there tions it cannot are national meet. It should For countries like Bulgaria Brexit supervision bodies, banks, insur- be very clear what is done on a will have a very important effect, ance companies, telecommu- national level and what is done because London had the strongest nications companies, anti-trust on a European one. As far as the voice among the non-eurozone commissions. Business will be market is concerned, the regula- countries. That showed that you facilitated and the price of trans- tion should be on a European could be a member of the EU border transactions will fall when level but small issues should not and not be in the Eurozone. That more rights are transferred to the be raised to it. returned the EU to its roots: the EU and those organizations start Single Market. With Brexit, there working on a European level. That should be well settled so will be a stronger trend towards that citizen can know what to solutions being focused on the Two directives were recently expect from whom and make the problems of the eurozone and adopted related to the digital EU more comprehensible, be- they are different from those of market for reporting data leak- cause the common understanding the Single Market. Though the eu- age as a result of hacking attacks. of it is of a large administration rozone and the Single Market are However, the requirements for that spends a lot of money. That no alternatives, the topic about information system security in is not correct, because the com- the Single Market will lose weight the directives differ from those mon European budget is 40 times at the expense of that related to in the regulation for data protec- smaller than the national budgets maintaining the Euro. tion. So a company operating in of the countries but it is expected several countries has to choose to solve all our questions. The *Ivaylo KalÀ n is chief economic which one to observe – the direc- European administration receives adviser at Razvitie Fund, former tive or the regulation. Although 5% of the European budget – minister of foreign affairs they are both effective on a Eu- there is no such administration ropean level, the company has to in the world. Europeans pay the choose whether to report the data price of a cup of coffee a day to leakage in the country where it Brussels and expect roads, border took place or in the country of its protection and social policies. registration. But the budget discussion in the European Commission is already Brexit came as a new challenge not so much about amounts than to the European Single Market. about efÀ ciency, i.e., what is cover story 25

More Countries Comply With the Maastricht Criteria If the Eurozone were being created today, its structure would have been very different

A À le picture shows a copy of the Maas- tricht Treaty displayed dur- Over the last couple of weeks ing the conference `Twenty there is a lot of talk about Bulgar- Years Treaty ia’s membership in the Eurozone – on European a step widely considered as inevi- Union: ReÁ ec- table and indispensable for further tions from Maastricht`, integration with the European in Maastricht, Union (EU). Apart from political The Nether- will, Bulgaria should meet certain lands. formal criteria, especially in view of its macroeconomic and À nancial stability, writes economist Adrian Nikolov from Institute for Market against euro. future to reduce it under 60%, es- Economics. As for 2015 the average value of pecially in Greece (177%) and Italy (132%). Here come the convergence cri- the countries with lowest inÁ ation teria (i.e. Maastricht criteria) that was 1,2% while long-term interest As for inÁ ation, which was one impose limits on inÁ ation, public rate – 1,9%. of the problems of ECB before the debt, budget deÀ cit, long-term Compared with before crisis nine crisis, we see opposite trends in the interest rate and exchange rate countries have complied with all last couple of years. ECB put a lot between national currency and criteria in 2015 – Bulgaria, Den- of efforts to prevent deÁ ation in euro. Last reports of European mark, Estonia, Latvia, Lithuania, the Eurozone. At the same time the Central Bank (ECB) on compliance Luxemburg, Romania, Slovakia Maastricht rule aims to prevent too with the criteria show that before and Czech Republic. Ireland, Ger- high inÁ ation which is why most the À nancial crisis only Bulgaria many and Sweden fail in only one countries have complied with the and Estonia had complied with all of the criteria. limit in 2015. Maastricht criteria. Interestingly enough, four of the EU countries have managed to also They include 5 basic requirements: member states that have complied narrow their budget deÀ cit and it’s 1) inÁ ation – it should be as much with all criteria in 2015 (Bulgaria, higher than 3% only in three of the as 1,5% above the average value Denmark, Romania and Czech four so-called PIGS countries – Por- of the three member states with Republic) are not part of the Euro- tugal, Spain and Greece (with the lowest inÁ ation zone. Six of the Eurozone member exception of Italy). Close, but not 2) budget deÀ cit – as a share of states have complied with them – 5 above 3%, are United Kingdom, GDP it should be as much as 3% newly accepted and only Luxem- France and Croatia. 3) public debt – 60% at most as a burg from the old ones. This means As for Bulgaria, it fulÀ lls all the share of GDP that if Eurozone was being created 4) long-term interest rates – as ofÀ cial requirements for member- today and its future members had ship in the Eurozone. This applies much as 2 percentage points to comply with the Maastricht cri- above the average value of the not only for 2015, but for most of teria, its structure would have been the time since the crisis. With the three countries with lowest the opposite of today. inÁ ation exception of the sharp rise of deÀ cit 5) stable Euro exchange rate – this Basically, the main problem most in 2014, the country follows all rule is more Á exible. Applicant states have is to bring their public limits. So Bulgaria is in compliance country must not have deval- debt under 60% of GDP. In some – but when is the right time to ask ued signiÀ cantly its national countries it is close or even above to join the Eurozone is a matter of a currency in the last two years 100%, with no prospect in near separate discussion. amcham events 26

AmCham Talks Better Business Environment with Political Parties

who presented his views on Bulgarian À scal policy, foreign relations, defense policy, judicial reform, national education strategy, integration of Bulgaria in the Eurozone.

On February 23, 2017 AmCham had a meeting with the Movement for Rights and Freedoms (MRF), represented by Mustafa Karadayi, chair, Yordan Tsonev, economic expert, Filiz Hyus- menova, member of European Parlia- ment, Ilhan Kyuchyuk, member of the committee on foreign affairs, and Peter Chobanov, economic expert. Tsonev elaborated on the key priorities in MRF program, namely the rule of law, tax system preservation, human capital development and education, BSP leadership rep- The Chamber intends to sign a memo- investment promotion, healthcare and resented by Dragomir randum of understanding with major Stoynev, Kornelia e-government reform. Ninova and Zhelyo political parties. AmCham held meet- Boichev met with the ings with Hristo Ivanov of “Yes, Bul- “MRF believes that the procedural is- AmCham board. garia”, Radan Kanev of “New Repub- sues and the administrative and legal lic”, Boyko Borissov of GERB, along procedure in the judicial system are on with representatives of Movement for the À rst place, but not the prosecution Rights and Freedoms (MRF), Volya structure and criminal proceedings,” Political Movement, the Reformist Tsonev said. There is a lack of a mod- Block, and Bulgarian Socialist Party. ern and quick process of help to the business, he added. During the meetings with the parties BoD representatives of the Chamber AmCham had a meeting with Volya discussed common areas of interest political movement on Feb. 24, 2017. relating to the economic programs of The latter was represented by the the parties. movement’s team of experts including Veselin Mareshki, Stefan Avgustinov, Hristo Ivanov, the leader of “Yes, Dimitar Topalov, Lyubomir Ivanov, Bulgaria”, presented to AmCham Miroslav Nikolov, Veselin Halachev, the new political movement that was Kalinka Kovacheva, Veselin Mareshki- established in response to the contin- son. Mareshki, party’s chairperson, ued inaction on the political scene on outlined the key priorities: investment issues related to rule of law, corrup- promotion, preserving the current tion and the lagging judicial reform. tax system, À ght against corruption, Another priority of the formation is to e-government, reduction of adminis- develop a strong economic agenda for trative burden for business by review- stimulation of growth and investment ing licensing regimes, measures for in the country through a vigorous tackling the demographic crisis, incen- debate with the business. tives for small- and medium-sized enterprises. On Jan. 23, 2017 AmCham met with Radan Kunev, chair of New Republic, On March 1 AmCham met with the amcham events 27

predictable business environment, continue with the judicial reform, keep the current tax system, and work for a more Á exible labor policy and legislation. The Block representatives said they are open for a dialogue with Am- Cham business community and regular discussions of issues important for the business. Zelenogorski elaborated on the need for greater autonomy of mayors and decentralization of local government.

On March 13 AmCham had a meet- Mustafa Karadayi, Reformist Block’s representatives ing with the Bulgarian Socialist Party, chair of MRF, and his Bozhidar Lukarski, chair of United represented by Kornelia Ninova, chair team discussed business climate issues Democratic Forces (SDS), Naiden Ze- of National Council of BSP, Dragomir at the meeting with lenogorski, chair of election headquar- Stoynev, economic expert, and Zhelyo AmCham board. ters, Antoni Trenchev, MP candidate. Boichev, MP. The Reformist Block assured it will work for achieving a better and more “It is for the À rst time that BSP puts in

Meeting with Volya political movement in AmCham ofÀ ce.

Meeting with the Reformist Block. its platform economic issues on top, in particular industry development and production, Ninova said. BSP envis- ages state À nancing by establishing a 500-million-Leva “Industry” fund for public-private partnerships. BSP stands also for the development of the capital market and restructuring the Bulgarian Bank for Development in a way that will effectively facilitate small and medium-size enterprises. Ninova further said BSP will introduce progressive income taxation of 20% for persons with more than 10,000 Leva of monthly income. amcham events 28

Seminar Tackles Power of Digital Marketing, Business Opportunities for SMEs

Zlatina Ruseva-Savova Nikola Stoyanov Nevena Mladenova Maria Zhekova

nologies, Dimitar Iliev, CEO, Navtech, Ventsi Popov, project lead, Zinga Soft.

Zlatina Ruseva-Savova proposed AmCham and Small and Medium Size Enterprises Promotional Agency can cooperate in building of a bridge for export À nancing of SMEs. Nikola Stoy- anov elaborated on the new approach of direct communication of the Agency with the companies and establishing of a register for SMEs. A national network for support of SME is being developed where every company can present an own business idea to be À nanced.

Maria Zhekova said that 57% of B2B Labs Complex at SoÀ a The power of digital marketing in the purchase evaluation is done without Tech Park. exploration of new business opportu- speaking to a human, shows the analy- nities, the prospects for the SMEs to sis of McKinsey & Company. According enter foreign markets and the consumer to International Data Corporation that behavior online were at focus during deÀ nes six stages of the customer jour- the Seminar “Digital Marketing and ney based on speciÀ c goals that must be e-Commerce” organized end-February met: by the American Chamber of Commerce Companies must align their demand in Bulgaria, Small and Medium Enter- generation activities and keep pace as prises Promotion Agency and Microsoft customers progress; Bulgaria Business at the SoÀ a Tech Park, Labs Complex. Each customer may have a unique path to purchase, but all research is done The speakers at the event were: Zlatina online; Ruseva-Savova, co-chair of the Public Customers can move forward or back- Procurement and EU Funding Advi- ward and even appear to skip steps. But sory Committee and AmCham board they need to accomplish stage-speciÀ c member, Nikola Stoyanov, deputy goals before they buy; executive director, Small and Medium Size Enterprises Promotional Agency, There are differences in importance and Nevena Mladenova, manager Structural the amount of time spent in each stage Funds and Funding Programs, Micro- for different kinds of customers and re- soft Bulgaria, Maria Zhekova, market- gional markets, but at the highest level ing manager SMEs, Microsoft Bulgaria, they share the same decision making Kaloyan Parchev, CEO, Zetta Tech- process;

amcham events 30

Ambassador: U.S. Trade, Investment in Bulgaria Exemplary

Dr. Krassimira Chemishanska. U.S. Ambassador Eric Rubin.

American companies have invested mil- U.S. investment in Bulgaria reached lions of dollars in community centers, in $1 billion in the past four years. In the environmental conservation, in educa- words of the envoy, the companies are tion, and healthcare, serving as a model not only providing jobs and building the example, said U.S. Ambassador Eric Ru- economy, but they are directly investing bin during the AmCham business lunch in Bulgarian communities. In 2015 the on March 2, 2017 held at the SoÀ a Hotel bilateral trade between the United States From left: Alex Nestor, Balkan. The diplomat spoke in front and Bulgaria amounted to $1.05 billion, Elena Marinova, Musala Soft, Plamen of 120 members and partners on the with a near parity achieved between US Zhechev, Cisco perspectives of U.S.-Bulgarian economic and Bulgarian exports. Systems Bulgaria, Iva relations. AmCham Bulgaria was highly Todorova, IBM, Iravan praised for its efforts to facilitate the A healthy business environment and Hira, Hewlett-Packard, and Zlatina Ruseva- business relationships between Bulgaria strong economic relations with the Savova. and the United States. United States and other partners generate economic growth, rising incomes and increased prosperity for all levels of society, said Ambassador Rubin. According to him those conditions will work to stem Bulgaria’s demographic decline.

“I am an optimist,” Ambassador Rubin said. He pointed out that he would like to see young people stay in this country and see others who have left come back, start new businesses, and help shape this country’s future.

Dr. Krassimira Chemishanska, Am- Cham president, elaborated on the Chamber’s 2017 White Paper with strategic recommendations to the government. innovation 31

Sensata Technologies Opens New Testing Facility in Bulgaria

“Our customers rely on Sensata to deliver proven, mission-critical sensing capabilities that help solve some of their toughest problems while meeting stringent quality and performance standards,” said Paul Chawla, Senior Vice President, Performance Sensing, Europe. A single automotive sensor designed by Sensata engineers undergoes over 200 functional tests in the Testing Laboratory before it moves to manufac- turing to simulate the complete lifetime of a car in three months’ time.

The sensors are tested to endure temper- atures from -40 to +1,200 degrees. The sensors also undergo tests for protec- Several testing labs in The Testing Laboratory and Mechani- tion against moisture, dust and “steam SoÀ a's Drouzhba dis- cleaning, where each sensor is exposed trict were presented at zation OfÀ ce is now operational and the ofÀ cial opening of employs more than 100 highly-skilled to high-pressure water steam reaching the new facility center. engineers and technicians in the ar- up to 100 degrees Celsius and pressure eas of durability testing, research and up to 100 bars. development, À eld failure analysis and equipment development for Sensata’s Sensata Technologies Bulgaria currently automotive sensing technology. The employs more than 3,000 people in company invested approximately 3 mil- SoÀ a, Botevgrad and Plovdiv. lion USD in the Testing Laboratory and Mechanization OfÀ ce. amcham events 32

Winter Sport Weekend Offers Ski, Bowling

joined in the winter adventures and demonstrated exceptional sport en- thusiasm and an unsurpassed drive for achievement. The event started with a cocktail and wine tasting at the hotel lobby, where representatives of different teams had the chance to network.

On Saturday morning around 50 skiers and snowboarders raced down the “Stenata” slope under the loud cheers of the AmCham audience. In the afternoon both skiers and other event participants took part in a very loud, cheerful and tough bowling competition. Participants enjoyed In the middle of March AmCham the abundant snowfall. members visited Pamporovo, where Venislav Iotov, AmCham vice-pres- the first ever AmCham Winter Sport ident, and Nikolay Melemov, mayor Weekend was held. Building on the of Smolyan, greeted the guests at long-lasting and successful Ski Tour- the awarding dinner. Winners in all nament the Winter Sport Weekend categories received attractive awards, included the traditional ski competi- kindly provided by various AmCham tion, but also offered participants members and partners. Among the alternative entertainment activities most attractive categories were the such as a bowling tournament and “Veteran” award presented to Petar board games. Popov from Curtis Balkan and the “Youngest competitor” award shared Perelik hotel hosted the bowling game. Participants from 13 companies between the 6-year-old twins Angela facts and ﬁ gures 33

Petya Kolcheva (right), among the winners in womens Venislav Yotov, vice-president of AmCham, is awarding the category awarded at the ceremony. best performing Dimitrovi family from Air Berlin. and Maria Kandilarovi. The “Best team performance” award was won Participants were just as passionate by the small, but very enthusiastic on the dance floor, where the celebra- team of Abrites. Runner ups were tions continued until midnight with Congress Engineering (2nd place) and both modern disco dances and the Nemetschek (3rd place). A special traditional Bulgarian horo. “Best performing family” award was given to the Dimitrovi family from AmCham Bulgaria extends a special Air Berlin, who received recognition thank you to the kind support of the for their outstanding performance sponsors Abrites and The Coca-Cola in the children, women and senior Company Bulgaria, as well as the executive categories. kind host Pamporovo AD.

Positive Expectations in Testing Time – Deloitte CFO Survey Deloitte Bulgaria announced the À ndings of De- loitte CE CFO Survey in front of CFOs from leading Bulgarian and international companies in March at the SoÀ a hotel Balkan. This is the 8th edition of the Survey report, tracking the latest thinking and actions of CFOs representing largest and most inÁ uen- tial companies in the region.

For Bulgaria the survey was held for the 6th time, following the Central-European questionnaire and methodology. CFOs were asked to share their expectations in three major areas: economic outlook, business environment outlook and companies’ growth outlook. on the possible consequences of the UK leaving the European Union, Bulgarian CFOs see less or no This survey paints a picture of an increased conÀ - impact on their businesses. However, similar to the dence across the CE region. CFOs in Bulgaria also majority of their colleagues in CE, they are mainly enter 2017 in better spirits than any time since the concerned that Brexit may lead to increased last 4 years. The brighter mood represents improved complexity and cost and expect restricted work- prospects for the CFOs own businesses and the force mobility. It will be extremely interesting in early economic growth. Strict cost control is still to keep 2018 to see how the views and predictions of our an eye on, however the openness to introduction respondents have stood the test of time. of new products / services is now more visible. For more information on the survey and the report, While CFOs across the region hold varying views please visit: www.deloitte.bg advice corner 34

New Regime Amends Special Pledges

legal status of the pledger (reorganizations of any kind) will be impossible. Even more important, however, is the fact that without the previous pledgees’ explicit consent it will be impossible to establish further pledges over the same property or to register commencement of enforcement by a next pledgee.

It is without doubt that this change puts a priority on the protection of the rights and legal interests of the À rst registered pledgee, which is probably grounded, minding the practices from the recent years including schemes with artiÀ cially created later pledges in favor of related parties, which were By Velyana Hristova, used as an instrument to snatch the pledged prop- Penkov, Markov & Partners erty without the initial pledgee to be in a position to counteract. Exactly 20 years ago, with the adoption of the Spe- cial Pledges Act (SPA), the still Á edgling Bulgarian In fact, a potential risk is created for acting in bad- commerce law was enriched with the À gure of the faith creditors to refuse without grounded reasons to special pledge. Its main difference in comparison give consent for the establishment of further pledg- with the regular pledge is the lack of obligation for es, thus preventing the debtor from receiving ad- the actual transfer of the pledged property in the ditional À nancing which might be important for the pledgee’s possession – a characteristic that makes latter. Nevertheless, the measure undertaken comes the special pledge an especially appropriate securiti- in response to an urgent public interest and as such zation mechanism for business purposes. it is justiÀ able. On the other hand, it could probably contribute to the overcoming of the practice for ex- Unfortunately, with the accumulating practice in the cessive securitization of the creditors’ receivables. application of the law, defects, inconsistencies and omissions have become clear, some of which have to Another signiÀ cant change concerns the regime for a great extent compromised the idea. During the re- enforcement against the pledged property, intro- cent years such issues have turned the SPA into one ducing requirements for publicity of the deadlines of the instruments that bad-faith debtors have most and terms and conditions for effecting of the sale of often preferred for fraud and unpunished disposal pledged property and a requirement on the minimal of the content of the securities that are supposed to sale price of the pledged property by the À rst sale guarantee the collection of the creditor’s receivables. attempt. Such minimal price shall be the tax evaluation for immovable property and the insurance Therefore, putting an end to such practices has been value for movable assets. The adequacy of such long overdue. The adoption of the new amend- criteria as regards the minimal sale price is question- ments to SPA, some of which have entered into able as least for the predominant number of cases. force, while others will become effective as of Sep. 1, 2018, certainly represents a step in this direction. Under the new special pledges regime it is not pos- A different question, however, is whether all of the sible anymore for the pledgee to effect enforcement amendments are the correct steps and whether they outside and irrespective of the bankruptcy proceed- are sufÀ ciently well determined. ings, in case the latter is initiated earlier than the registration of the commencement of enforcement. As immediately becomes obvious some of the This possibility also used to be very frequently used amendments create guarantees for the pledgee that in practice for fraudulent actions damaging the rest without the latter’s explicit consent with respect of the bankruptcy creditors, as well as the debtor. to a particular action, not only actions of disposal over the pledged property but also changes in the Explicitly regulated is the surviving of the mortgage, advice corner 35

when the mortgaged property is sold under the ritization mean which is otherwise very Á exible and terms and conditions of the SPA. convenient.

In addition to the above the most commented While we take into account the indisputably positive amendments in the law concern the status of the aspects of the reform attempt, the aim of the above CRSP, the new regulation of the registration proce- article is to draw the attention on certain controver- dure taking effect as of Sep. 1, 2018, and the access to sial solutions, which are already recognizable in the the data registered in the CRSP. These amendments, new regime and which will need to be put under which are already signiÀ cant enough to be subject balance and to be overcome through the practice or of a separate independent analysis, will probably to be subject to further amendments of the law until make the registry of special pledges much easier to the optimal balance between legal security and ef- be accessed and will facilitate the use of this secu- À ciency of the special pledge institute is achieved.

Exchange Rates Clauses Are Matter of Thorough Consideration By Tzvetelina Dimitrova EHSURGXFHGIRUDORQJSHULRGRIWLPH Attorney-at-law SDUWLHVSUHIHUQRWWROLPLWWKHLUSD\PHQW Georgiev, Todorov & Co Law OfÀ ces REOLJDWLRQIURPWKHYHU\EHJLQQLQJEXW WRXVHÀH[LEOHFODXVHLQVWHDGRIVLJQ :KHQHQWHULQJLQWRDORQJWHUPWUDQV LQJDQDGGHQGXPHYHU\IHZPRQWKV DFWLRQWKHSDUWLHVXVXDOO\FKRRVHYHU\ 2QWKHRQHKDQGWKHULVNLQVXFKVLWX FDUHIXOO\WKHLUEXVLQHVVSDUWQHUDQG DWLRQDULVHVZKHUHIRUH[DPSOHWKHUH FRQFOXGHDFRPSUHKHQVLYHFRQWUDFW LVDSROLWLFDOFULVLVRURWKHUIRUFHPDMRU DWWHPSWLQJWRUHJXODWHDOOSRVVLEOH LQWKHFRXQWU\ZKHUHWKHIDFWRU\LV IXWXUHVLWXDWLRQV7KHULJKWVDQG ORFDWHGDQGWKDWZRXOGLQÀXHQFHWKH REOLJDWLRQVRIWKHSDUWLHVDUHEURDGO\ SULFHRIWKHJRRGVDQGWKHODERUFRVWV GLVFXVVHGWKHSD\PHQWPHWKRGLV VWULFWO\GH¿QHG+RZHYHUSDUWLHVWHQG 2QWKHRWKHUKDQGWKHVXSSO\DQGGH WRQHJOHFWWKHFXUUHQF\ULVN PDQGRIWKHJRRGVPLJKWDOVRFKDQJH DQGWKHSDUWLHVVKRXOGQRWEHERXQG 7KHDLPRIWKLVWRSLFLVWRLOOXVWUDWHKRZ E\VRPHVWULFWUHODWLRQWKDWZRXOGOHDG LPSRUWDQWWKHH[FKDQJHUDWHFODXVHVLQ WRVXEVWDQWLDOGHSULYDWLRQRQWKHVLGH WKHLQWHUQDWLRQDOFRQWUDFWVDUHDQGWR RIRQHSDUW\DQGXQMXVWHQULFKPHQWWR SURYLGHVRPHSUDFWLFDOVROXWLRQVLQWKLV WKHRWKHUSDUW\ UHJDUG $FFRUGLQJWRWKH%XOJDULDQODZVXFKFDVHVPLJKWEH &RQWUDFWLQJZLWKIRUHLJQFRPSDQLHVLVFRPPRQWKLQJ FODVVL¿HGDVEXVLQHVVIUXVWUDWLRQZKHUHWKHSUREOHPLV )RUH[DPSOHSDUW\$LQFRUSRUDWHGLQ86$DJUHHV VROYHGE\WKHFRXUWWKDWPLJKWLQWHUYHQHLQWKHFRQWUDF WRGHOLYHUJRRGVWRSDUW\%UHJLVWHUHGXQGHUWKHODZV WXDOUHODWLRQRIWKHSDUWLHVDQGPRGLI\RUWHUPLQDWHWKHLU RI3RODQGZKHUHWKHJRRGVKDYHEHHQSURGXFHGLQ FRQWUDFW+RZHYHULQVWHDGRIJRLQJWRWKHFRXUWWKH DIDFWRU\LQ&KLOH(YLGHQWO\WKHUHODWLRQVKLSEHWZHHQ SDUWLHVPLJKWIRUPXODWHWKHLUUHPXQHUDWLRQFODXVHLQ WKHSDUWLHVLVLQWHUQDWLRQDOWKUHHGLႇHUHQWFRXQWULHVDUH VXFKZD\WKDWLWZRXOGEHÀH[LEOHDQGLWZRXOGQRWOHDG HQJDJHGDQGWKUHHGLႇHUHQWFXUUHQFLHVDUHDSSOLFDEOH WRVXFKH[WUHPHLPEDODQFHRIWKHWUDQVDFWLRQ2QHZD\ 7KHUHIRUHWKHSUREOHPLVQRWWKHSD\PHQWREOLJDWLRQ LVWRLQFOXGHDSULFHIRUPXODWKDWLVÀRDWLQJWKXVWKH LWVHOIEXWWKHFODXVHWKDWSURYLGHVIRUWKHSD\PHQW SD\PHQWVKDOOEHHႇHFWHGLQDFFRUGDQFHZLWKWKHFXU PHWKRG UHQF\UDWHVDWWKHWLPHRILVVXDQFHRIWKHLQYRLFH7KH RWKHUZD\LVWRSURYLGHIRUDSULFHIRUPXODWKDWLQFOXGHV 7RFODULI\WKLVZHVKRXOGH[DPLQHDVLWXDWLRQZKHUHWKH ¿[HGH[FKDQJHUDWHV7KLVZRXOGOHDGWRPRUHSUHGLFW SULFHRIWKHJRRGVLVQRW¿[HGE\WKHWLPHRIWKHFRQFOX DELOLW\DQGIRUDFHUWDLQSHULRGRIWLPHWKHSDUWLHVZRXOG VLRQRIWKHFRQWUDFWEXWLVGHSHQGHQWRQVHYHUDOIDFWRUV KDYHVRPHFODULW\DVWRWKHLUH[SHFWDWLRQV+RZHYHU ±IRUH[DPSOHSULFHIRUWKHSDUWVRIWKHJRRGVHP VXFKFODXVHVVKRXOGEHGUDIWHGYHU\FDUHIXOO\DQGZLWK SOR\HHUHPXQHUDWLRQWD[HVHWF:KHUHWKHJRRGVVKDOO FRQVLGHUDWLRQRIQXPEHURIIDFWRUV cradle 36

Construction – Laggard Doomed to Change

Multiple global megatrends are shaping the future of the industry

remained averse to changing their traditional methods.

Even more, the construction industry dooms our well-being not only in our clos- est environment, but leaves a devastating ecological footprint in many senses. The sector is liable for serious air pollution, energy and water consumption, waste generation and nature degradation. What is more, the buildings the sector produces are inefÀ cient in energy and water savings. For example, E&C is responsible for about one-third of total direct and indirect CO2 energy-related emissions. No wonder the The Edge in Amster- By Chaika Christova dam, home of Deloitte industry is at the center of the global cli- and Touche, is world’s mate change debate. And according to the Construction as an industry is usually No. 1 sustainable WEF’s latest Global Risks Report the failure the engine behind the economic recov- ofÀ ce building, which of climate change policy is illustrates the value of ery after recession. It's the locomotive embracing innovation that drives other industries out of the in the E&C industry deadlock. That's economically speaking. the greatest risk to business In the social sense it's the industry that and society over the next ensures our nearest environment – our decade homes, ofÀ ces, industrial buildings, theaters, public and meeting places, The above challenges are expected to roads, infrastructure, etc. Our com- drive the technological advances in fort, health and well-being (not only construction industry. According to the in present tense, but also in the next report Shaping the Future of Construc- several decades) depend on that clos- tion, the industry has vast potential for est environment. According to recent improving productivity and efÀ ciency. statistics, Americans spend 90% of their Thanks to digitalization, innovative life time indoors and it is not likely that technologies and new construction the populations of other industrialized techniques, materials and tools that are countries differ much. already on the market, the sector has the tremendous opportunities to catch up Paradoxically or not, the Engineering & by transforming itself. Construction (E&C) is also the industry that is the ultimate laggard when speak- For example, new technologies in the ing of modern technology and innova- digital space will not only improve pro- tion – not only in the building processes ductivity and reduce project delays, but and technologies, but also in their im- can also enhance the quality of build- plementation in the ready products. ings and improve safety, working conditions and environmental compatibility. A new report by the World Economic Forum (WEF) and Boston Consulting Building Information Modelling (BIM – Group (BCG) – Shaping the Future of common name for the digital represen- Construction, underscores that compara- tation of the building process) plays a tive to other industries, productivity in central role here, as it is the key facilita- E&C has nearly stalled over the past 50 tor for many other technologies: the years. Technology was not making any building of a bridge, for example, can be fundamental advances, and companies greatly facilitated by combining robot- cradle 37

Apis Cor approached the issue of building this house from all sides and invited À ve world renowned companies, known for their innovative approach, as partners: PIK Companies Group, Samsung Electronics, TechnoNICOL corporation, Bitex Reibeputz company and Fabrika Okon company. Source: Apis Cor

ics and 3D printing via a parametrically The unusual shape of the house is on designed 3D model. purpose – to demonstrate the Á exibility of the equipment and diversity of avail- 3D printing able forms of the design and structure.

3D printing is widely used in food, cloth- Another extremely powerful lever for ing and fashion industry, for manufac- innovation in the industry is that of turing tools, for production of auto and plane spare parts, in implant surgery and construction materials prosthetic orthopedy, etc. 3D printable building models may be created with a The associated solutions are numerous computer-aided design (CAD) package. and wide-ranging – from incremental This is conceptually known for decades. innovation of traditional materials and In the last À ve years or so this technology existing characteristics to radically in- has been put to task in the construction novative materials with entirely new industry. Dutch and Chinese (Winsun capabilities. company) in demonstration projects have slowly constructed 3D-printed buildings But let's look at the most used man- in China, Dubai and the Netherlands. made material in the industry – the Those are examples of mostly plant- concrete. Now a day it can build not just based building technology, where prefab the dull gray hard surfaces. Over the elements are produced off site and are past decade many new types of concrete then assembled on site. and cement have been formulated with unthinkable before properties. Here we In February 2017 Apis Cor, a startup shall mention just three of them. based in Russia and in San Francisco 3D-printed a small residential house in Bendable con- just 24 hours. The “ink” they used was crete is 500 times concrete. The house was built com- more resistant pletely on site with the exception of the to cracking and windows and the household equipment. 40% lighter in The cozy 38 sq m home was “printed” weight. Its other in Stupino town, Moscow region in name is Engineered Cement Composites the severe Russian winter, when the technology (ECC). It is an easily molded temperature outside was -35 degrees. mortar-based composite, reinforced The mobile 3D printer with automatic with specially selected short random, mix and supply unit, that looks more usually polymer À bers, thus avoiding like a tower crane, was invented by the the inÁ exibility that causes brittleness company's founder and CEO Nikita and breakage in the regular concrete. It Chen-yun-tai. The construction cost of is more durable, bears severe loading the completely À nished house is $10,134, and the resulting expenses of repair are i.e., $275/sq m, when a regular house low. of the same size would cost $223 /sq m and would take months for building. LiTraCon (light transmitting concrete) is cradle 38

a translucent concrete building material for grassy vegetation to cover it, thus made of À ne concrete embedded with purifying the air and cooling it in the optical glass À bers. Thousands of optical hot days, ameliorating the microcli- glass À bers form a matrix and run paral- mate. lel to each other between the two main surfaces of every block. More recently Spanish researchers developed another kind of living It was developed in 2001 by Hungarian concrete, suitable for creating vertical architect Aron Losonczi at the Technical gardens and living walls on build- University of Budapest. A wall made of ing facades. Capturing rainwater, the LiTraCon has the strength of traditional multilayered cement encourages and concrete, but is offering a silhouette sustains the growth of speciÀ c mosses view of the outside world, plus much and lichens directly on the material. day light. This quality is very suitable Within an year, the “green” cement cre- for building ofÀ ces both for sustainable ates a patina or living painting on the and well being reasons. building surface.

Organic concrete is À rst created by A multiyear global project a Portugese architectural À rm, e- studio, which was patented in 2005. Although many innovative solutions are It encompasses organic and inorganic already being applied on a small scale material, seeds and fertilizers may or in a few countries, the industry still be added and is suitable for covering needs a large-scale application or bet- ground spaces – park and between the ter adaptation of current technological buildings lanes, steep slopes along the developments. roads, etc. Its permeability allows for the rain water to go underground and The WEF calls the Future of Construc- the surface remains dry and not slip- tion report a project – the À rst step of a pery. This moisture “battery” allows multiyear global project, aimed at supporting the E&C sector while it pursues Applications of BIM along the E&C Value Chain its transformation. (According to it the industry’s future success will rely heav- Source: The Boston Consulting Group ily on effective collaboration among all stakeholders.)

Subsequently, the project will focus on speciÀ c topics; for example, the ways that new technologies, materials and processes will improve the project delivery and the life-cycle performance of buildings, and the ways of selecting relevant measures from the industry transformation framework.

“Incremental change is not an option; by redeÀ ning the ultimate frontier, leapfrogging innovations in construction will À nally help to address major 7RXQORFNWKHSRWHQWLDOLQKHUHQWLQQHZWHFKQRORJLHVPDWHULDOVDQG societal challenges, from mass urbaniza- WRROVWKHLQGXVWU\DOVRQHHGVWRDGRSWWKHUHOHYDQWUHVSHFWLYHSUR tion to climate change,” says Michael FHVVHV)RULQVWDQFHWKHEHQH¿WVRI%,0DUHUHLQIRUFHGLIFRPSD QLHVH[SORLWWKHQHZDQFLOODU\RSSRUWXQLWLHVLWRႇHUV±QRWDEO\DQHZ Buehler, Head of Infrastructure and ZD\RIFROODERUDWLQJDQGVKDULQJLQIRUPDWLRQEHWZHHQVWDNHKROGHUV Urban Development at the WEF. “The $FFRUGLQJWRDUHFHQWVWXG\IXOOVFDOHGLJLWDOL]DWLRQLQQRQUHVLGHQWLDO widespread adoption of these innova- FRQVWUXFWLRQZRXOGZLWKLQ\HDUVEHFDSDEOHRISURGXFLQJDQQXDO tions is going to make a serious impact, JOREDOFRVWVDYLQJVRIWULOOLRQ RQ( &DQG socially, economically and environmen- WULOOLRQ LQWKHRSHUDWLRQVSKDVH tally.” 39

Courage to Build Cause The National Network for Children raises funds to build a modern House of Children For two years in a row the National Network for Children pursues an idea, approved and taken as The National Network for Children decision by the General Assembly of the Network. Our organization is a network that brings together The idea is to build a brand new Center for ad- over 140 civil society organizations working with children and families across the country. The Net- vocacy and training in children's rights. This will work supports and advises the organizations uniting be a center for know-how exchange between the their positions and leading advocacy campaigns Network member organizations as well as a center for implementing bettered policies and practices where children will develop their skills, learning for children and their families at home. A guiding what they can’t learn at school. We call this center principle in the Network is respecting as well as “The House of children”. protecting the children rights. We believe that all policies and practices that directly or indirectly Established 11 years ago, the National Network for affect children should be designed, implemented Children carries out advocacy campaigns in part- and monitored with the active participation of the children. We investigate the problems and nership with NGOs, businesses and institutions. À nd solutions in four main areas of child welfare: Furthermore, its activities are supported by children education, health, family and justice. The results themselves. "We create, defend and propose to the of our work are not seen easily as it take time and state and municipality institutions the certain poli- long term efforts. What we do requires persever- cies for children and families. Our aim is to consoli- ance and sense of purpose to reach results that date the non-governmental organizations working are stable and valid throughout the country. in the À eld of children and families and to improve the communication, the know-how exchange and into a decision to create and establish a Center for the sharing of best practices among those organiza- advocacy and training in child rights. Additionally, tions. Annually, our member organizations work the vision for this Center is to be also a hub for all with over 80,000 children and 13,000 families. The organizations working in the interest of the children Network together with its members have achieved throughout the country. What an extremely ambi- real changes in Bulgarian legislation", says the Ex- tious project for a country like Bulgaria! Thanks to ecutive Director Georgi Bogdanov. the fact that the NNC manages to defend the idea before the OAK Foundation and Velux Founda- tion the Network already purchased a land in the city center of SoÀ a. This year the big task is to raise funds for the architectural design and the prepara- tion of the start of construction works.

To raise donations is not easy. To raise donations for long-term project that aims profound change and investing in education is even harder. But let’s face it: such a house is not a superÁ uous luxury, but an investment in the future of the country. For investment even in one child is an investment in the future of Bulgaria.

The plot where the House of Children will be built is currently The administration of the National Network for used as parking. Children is open to all kind of support from the business for the realization of the common idea – Today the challenge in front of the National Net- the "House of Children". “We are open for advices, work for Children is to build a House for children logistics, in-kind donations or À nancial aid” openly which differs quite from the conventional under- shares George Bogdanov. And, we can see it form standing of what constitutes a "House of Children". now - any support is going to be accepted with grati- tude. The dream of a modern and up-to-date House of children was born two years ago growing gradually new members 40

Founded in 2005, Fox Networks FOX Crime, National Geographic, Nat Geo Wild, Group Bulgaria EOOD is a branch 24KITCHEN and distributes BabyTV and Sky News. The of Fox Networks Group (FNG), SoÀ a ofÀ ce employs highly professional programming, a primary operating unit of 21st creative, technical, sales, marketing and À nancial Century Fox. FNG consists of Fox teams and acts as a business coordination hub for 9 Television Group, which includes Balkan countries. Fox Broadcasting Company and 20th Century Fox Television; Fox Cable Networks, which includes FX Contacts: Networks; Fox Sports Media Group, National Geo- Kassimir Nikolov graphic Partners, and Fox Networks Group Europe, SVP Central & Eastern Europe Asia and Latin America. Together these units create, Managing Director Balkans & Russia program and distribute on a global basis much of 115G Tsarigradsko Shosse Blvd., Á oor 16 the world’s most popular entertainment, sports and 1784 SoÀ a nonÀ ction programming. In Bulgaria FNG operates Tel: 02 437 22 80 a portfolio of world famous TV brands FOX, FOX life, www.foxtv.bg

Software Group is a such as Bill & Melinda Gates Foundation, Interna- global technology tional Finance Corporation (IFC), Asian Development company that is spe- Bank, Asian Confederation of Credit Unions (ACCU), cialized in delivery Financial Sector Deepening (FSD), 7 of the top 10 channel and inte- MicroÀ nance networks (Finca, OI, VFI, Accion, Hope gration solutions for institutions that provide À nancial International, Microcred, ReAll), Bank South PaciÀ c, services. Founded in 2009 and headquartered in National Bank of Vanuatu, Fullerton Financial Services SoÀ a, Bulgaria, it currently serves a worldwide client Holding, Fidelity Bank Ghana, Grameen Koota Finan- base in more than 65 countries from 9 regional ofÀ ces cial Services, etc. located in Australia, Bulgaria, Egypt, Ghana, India, Contacts: Kenya, Mexico, the Philippines and the USA. The Kalin Radev, CEO company’s vision is to accelerate À nancial inclusion +35929231783 by creating cutting-edge technology solutions. Some www.softwaregroup.com of Software Group’s customers are organizations 115N, Tzarigradsko Shosse Blvd., 1784 SoÀ a

V+O Communication is tives, change perceptions and generate growth. A a leading strategic com- full-Á edged business and strategy partner of compa- munications agency in nies, institutions, and non-governmental organizations Southeastern Europe with unique client retention rate. V+O is a catalyst for with operations in growth that transforms, develops and gives strength Athens, SoÀ a, Belgrade, and value to companies, brands, and organizations. Bucharest, Tirana, A hub of creativity that breaks new ground in all Nicosia, Lagos, and Brussels. The ofÀ ce in Bulgaria types of communication landscapes, always making was established in 2004. We are a team of talented a difference. and passionate professionals with concrete knowl- Contacts: edge and accumulated experience. An agency Svetlana Savova, CEO of conversation starters, enablers and storytellers tel.: +359 2 850 96 04 of an original and disruptive sort that clients need. www.vando.bg A group of restless creative thinkers that constantly 102, Bulgaria Blvd., Block B, Á . 5, OfÀ ce 60, SoÀ a, 1680 seek for trailblazing ideas that create new perspec-