BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 10 – 17 OCTOBER 2008)
Sections/headline briefs:
MACROECONOMY:
· Bulgaria becomes the second Hong Kong
· New Bulgarian-Chinesse trade relations
· EU transfers �200 M to Bulgarian Development Bank
· Global economic crisis predicted to slow Bulgaria's economic growth to 5,5%
· Lukoil boss says gas prices should fall
· The deficit on the current account increases by 42%
· The USA to pour $90 M in Bulgaria
· Bulgaria visited by 4,3 million foreign tourists in eight months
· 55% cheaper telephones in 2 years
· The state increases NEK's capital by BGN 300 M
· Visa cards usage in Bulgaria more than doubles in one year, expected to keep growing in triple digits
INVESTMENTS:
· Japanese firm interested in investing in Bulgaria's Nuclear Plant Kozloduy
· Bulgarian-Portugese JV plans to invest �150 M in biomass power plants in Bulgaria by 2012
· Kraft Foods Bulgaria invests �800 000 in new coffee plant
· Foreign Direct Investment in Bulgaria down by �1.2 Bln by End-August
· Volvo Trucks invest BGN 8.6 M in 2008 in Bulgaria
COMPANIES:
· Three Bulgarian companies among 50 most dynamic IT firms in Central Europe
· Several companies to represent Bulgaria at Fisheries Exhibition in Brussels
· Two new railway cargo companies in Bulgaria
· 8 firms compete for highway "Trakia"
· Stroyko 2008 houses 750 companies
· Yahoo! steps on Bulgaria’s online ad market
· Volvo to build truck centre in Plovdiv
ANALYSIS:
· Bulgaria is a tax paradise in EU
Articles:
MACROECONOMY:
Bulgaria becomes the second Hong Kong
Bulgaria has become the second most attractive place for investments in the world after Hong Kong, according to the latest statistics of the United Nations Conference on Trade and Development, Minister of Economy and Energy Petar Dimitrov said in the coastal city of Varna. He also said he hoped there wouldnt be a decrease in the investment flow into Bulgarias economy and that part of West Europes capitals would be directed to Bulgaria. The world financial crisis will affect Bulgarias export, as 60 percent of it is for the EU.If consumption shrinks, this will inevitably affect the countrys economy,Minister Dimitrov said.The crisis causes the salaries to decrease, but the prices cannot keep rising forever the price of oil has started falling, although with a few month delay, and that of natural gas is also going down. However, the lower prices do not make the business happy, as they are indicative of a lower consumption.If the foreign investments to Bulgaria decrease, job positions will be closed. The interference of the US Government is not enough to curb the world financial crisis; rather, the worlds leading minds should be engaged in tackling this problem, the minister said also.
New Bulgarian-Chinesse trade relations
A new trade initiative has been brokered between the Bulgarian Chamber of Commerce and the Chinese ministry of trade. The Chinese ministry has tabled a plan to encourage Bulgarian firms to enter the Chinese market and increase the exports to China. They would like to see a bigger Bulgarian presence on their market as well as partnerships being forged between Bulgarian and Chinese firms, according to National Radio Darik. Beijing International Brand Management Centre is encouraging the import of high quality manufactured goods from Bulgaria. The list of imports ranges widely and includes building material, biomedicine, transport machinery and equipment, computers, raw materials and specialised equipment. Bulgaria is one of a number of eastern and central European countries that are expected to participate. A particular interest to China are foodstuffs, drinks, textiles and clothing, cosmetics, sports equipment, transport equipment, furniture, toys and jewellery. Stroitelstvo.bg reports that once Bulgarian companies need to first complete their registration to trade with China through the www.oncn.org website. It must send a presentation and a portfolio, and Chinese guarantee to respond within 20 days and offer a contract if the bid is acceptable. As part of the contract, Bulgaria will be guaranteed free promotion of their exports, advertising goods and the services of Bulgarian firms in the Chinese marketplace. Furthermore, the Chinese will provide technical, practical and logistical advice, handle risk management issues and provide investment information to companies across China. The Bulgarian Chamber of Commerce in turn wants to attract additional investment from China and bring more Chinese companies here. The proposals presented by potential Chinese investors must be in English, the sum of investment and details of the project.
EU transfers �200 M to Bulgarian Development Bank
Gratuitous aid from the EU for the small and large business in Bulgaria at the total cost of 137 million levs (1euro = 1.95 levs) will be allotted on two new schemes of Competitiveness and Innovation Programme (CIP). Yesterday Bulgaria's Minister of Economy and Energy, Petar Dimitrov presented the schemes to consultants and benefiters on the Open Doors Day. The programme for technical modernization of the small business will allot 68.45 million levs, the same sum will go for the big enterprises.
As the companies' access to credits has been hindered by the financial crisis, we are ready to draw more resources from the 2009 EU funds, Dimitrov explained. The topic has been discussed with Bulgaria's Deputy Prime Minister, Meglena Plugchieva. The total aid of 200 million euro on the CIP, planned for enterprises development will be transferred at once to newly established Bulgarian Development Bank.
Global economic crisis predicted to slow Bulgaria's economic growth to 5,5%
Bulgaria's Deputy Prime Minister and Foreign Minister Ivaylo Kalfin predicted Sunday that the country's economic growth, which currently stands at 7%, would likely be slowed down to 5-5,5% as a consequence of the global financial crisis.According to Kalfin, who is the Deputy PM in charge of the economy, the financial crisis would affect the inflow of foreign direct investments as well as Bulgaria's exports. Kalfin was positive that the country would preserve its economic growth of 7,1% by the end of 2008 but even a growth of 5% in 2009 would be a success amidst the raging global crisis.Meanwhile, Bulgaria's Economy Minister Petar Dimitrov predicted Sunday that the country's exports, which finally started to grow at a faster rate than the imports in the first half of 2008, would likely be hurt by the global financial crisis. The decrease in the exports depends on the decrease of the demand in the EU for which 60% of Bulgaria's exports are destined, Dimitrov explained.
Lukoil boss says gas prices should fall
Natural gas and electricity bills in Bulgaria should be slashed following the 40% drop in oil prices, Lukoil president Vagit Alekperov told Nova Television. Alekperov said all industries that tied prices to oil should reduce tariffs by 30-40%, and labeled the price hike in Bulgaria an unnatural process. The cost of fuel Bulgarian gas company Bulgargaz buys from Russian giant Gazprom hinges on the price of black oil and gas oil nine months back and the US dollar. Other factors are the expected consumption and the quantities pumped to different suppliers.While oil plunged, natural gas in Bulgaria jumped by 23.89% as of October 1 as the energy regulator put prices on hold.Alekperov forecast oil prices will hover in the region of USD 70 and 100 a barrel next year, and are seen at USD 105, 90 or 80 by 2013.
The deficit on the current account increases by 42%
The deficit on the current account towards the end of August amounts to 4,77 billion Euro, which represents an increase of 42% on a yearly basis. This is data from the Bulgarian national bank (BNB), cited by Money.bg. The relative amount of the deficit on the current account as a part of the GDP is 14% compared to 11,6% a year earlier.Only for August 2008 the deficit amounts to 227,6 million Euro compared to 265,3 million Euro a year later.The trade deficit for January-August 2008 according to preliminary data of BNB amounts to 5,75 billion Euro compared to 4,37 billion Euro for the first 8 months of 2007.Export amounts to 10,56 billion Euro compared to 8,63 billion Euro for the same period in 2007, as it increases by 22,4% on a yearly basis.Direct investments cover 62,5% of the deficit on the current account for the period, compared to 123,7% for the 8 months of 2007.
The USA to pour $90 M in Bulgaria
"Over USD$ 90 million will be invested in joint military facilities on the Bulgarian territory," US Deputy Chief of Mission to Bulgaria Alexander Karagiannis stated at Novo Selo military base. So far it was known that the US army has allotted about USD $62 million for the construction of Bulgarian-American facilities. It transpired that the USA would help the modernization of the Bulgarian armed forces in the areas of aviation and infantry. The US and the Bulgarian governments have already agreed to invite US companies dealing in the spheres of energetics, Hi-Tech, etc. to invest in Bulgaria. A joint air exercise with F16 and MIG 29 will be held in Bulgaria next month. Mr. Karagiannis also informed that US military vessels would lay anchor in Varna and Bourgas Black Sea ports.
Bulgaria visited by 4,3 million foreign tourists in eight months
Over 4,3 million foreign tourists visited Bulgaria in January-August of 2008, which is a 15% increase compared to the same period of 2007, according to preliminary data announced Monday by the head of the country's State Tourism Agency Aneliya Krushkova. The foreigners spend over EUR 1,5 B in Bulgaria for the specified period, which is a 12,1% increase from the 2007 levels. At the same time almost 4 million Bulgarians traveled abroad spending some EUR 911,1 M - a 25% increased compared to the first eight months of 2007. Krushkova announced the data during the presentation of the first regional organization for the management of a tourist region dedicated to the Sofia tourist region.
55% cheaper telephones in 2 years
The prices of telephone calls from a fixed to a mobile phone are expected to decrease by up to 55% in the next two years. The connection between mobile networks is expected to decrease by up to 30%. These are forecasts by Industry Watch in a report of the Bulgarian telecommunications market, HiComm announced.The price decrease depends on the price decrease of the connection between the mobile operators. In mobile networks they are 2,4 times higher than the EU average, the report points out. The operators have a nearly 40% higher price for a phone call to a fixed telephone. The European Commission recommends that the national regulators put a price ceiling and expects up to 70% decrease of prices. The Commission for Message Regulation offers a decrease of 50-46% by 2010.The termination prices (mutual connection) in the mobile networks in Bulgaria are 2,4 times higher than the EU prices on average.Phone services consume 5,5-6% of household expenditures. The benefits for customers frоm the price decrease in the end of 2010 could be 150 million Euro per year. The active SIM cards in Bulgaria are 9,9 million.
The state increases NEK's capital by BGN 300 M
Bulgaria's Cabinet plans to inject 300 million leva into the National Electric Company (NEK) to cover the costs of the transitional stage of building the nuclear power plant at Belene on the Danube River, the Government press service said in a statement.The cash would be given as an equity hike in NEK, which is now part of the Bulgarian Energy Holding (BEH) that the Cabinet created in September 2009 by integrating Maritza Iztok mines, Maritza Iztok 2 thermal power plant and NEK into the holding structure of gas provider Bulgargaz.The transitional stage vital for the succesful completion of the project and will end in December 2009, according to the statement. With the allocation of the 300 million leva, the transition stage of the development of Belene has been assured until its financial completion by December 2009.The cash injection is meant to persuade banks that, with the Government fully backing the project support for the project, it was a safe bet to lend money for the construction of the future power plant. By the end of 2009, NEK will have to assume the expences of 450 million euro for the plant's equipment, Dnevnik daily reported.Some funding will come from Germany's RWE, which was picked earlier in October to buy a 49 stake in the company that would build and operate Belene after offering to pay 1.275 billion euro for the stake, rising to two billion euro by the time the power station is finished in 2014. It also offered NEK, which has had trouble finding banks willing to lend the money for Belene in the current global credit squeeze, a loan of 550 million leva to finance the project.The deal is expected to be signed by end-November, by which point the terms of the contract would be finalised.NEK will own the remaining 51 per cent in Belene, which, Bulgarian authorities hope, would once again make the country a major electricity exporter in South-Eastern Europe, after it had to shut down Soviet-built reactors at its Kozloduy power plant before joining the European Union in January 2007.Belene's twin 1000-MW reactors would be built by Russia's Atomstroyexport, controlled by gas company Gazprom, with France's Areva and Germany's Siemens as subcontractors. The construction costs have been set at four billion euro but the total outlay on the project is expected to be closer to seven billion euro, if not more, given the rising global commodity prices.The nuclear plant faces strong opposition from environmental NGOs who argue that the site at Belene is not safe.
Visa cards usage in Bulgaria more than doubles in one year, expected to keep growing in triple digits
Usage of Visa cards in Bulgaria rose by over 130% to 1.2 billion euro ($1.6 billion) in the year ending June 2008 and is expected to continue to grow in triple digits, a Visa Europe official said on Thursday. The growth potential of the country is huge," Visa Europe manager for Bulgaria, Krassimira Raycheva, told SeeNews on the sidelines of a news conference held to present the V Pay Visa debit cards in Bulgaria. The number of Visa cards in issue in Bulgaria rose by some 45% to 1.9 million in the year ending June 2008, Raycheva added. She declined to give the market share of Visa cards in Bulgaria, citing lack of official data. Bulgaria, a Black Sea country of 7.7 million, joined the European Union in 2007. Visa Europe is an independent business with an exclusive European licence to use the Visa brands, products and technology.
INVESTMENTS:
Japanese firm interested in investing in Bulgaria's Nuclear Plant Kozloduy
The Japanese company Tokyo Electric Power is interested in investing in Bulgaria's nuclear power plant in the Danube town of Kozloduy, the Pari Daily reported.This became clear on Thursday as Bulgaria's Minister of Energy and Economy Petar Dimitrov met with a Japanese business delegation.The company is interested into the possibilities to reopen Reactors 3 and 4 of the plant, which were closed down on January 1, 2006, as part of Bulgaria's EU accession negotiations.Alternatively, it might also be interested into the building of new nuclear reactors in Kozloduy.The Japanese delegation included representatives of companies from the chemical industry, agriculture, biotechnologies, high-tech, banking and finance sectors. Bulgaria's Economy Minister Petar Dimitrov presented the country's advantages as an investment destination stressing the cheap electricity and natural gas. Dimitrov pointed out that the bilateral trade between Bulgaria and Japan was rather unsatisfactory as it amounted to only USD 130-150 M per year. The organizing of the Bulgarian Days in Japan in 2009, which will also be attended by Bulgaria's President Georgi Parvanov, was discussed during the meeting. The Bulgarian Ministry of the Economy is also considering holding an investment forum in Japan in an effort to attract more Japanese firms.
Bulgarian-Portugese JV plans to invest �150 M in biomass power plants in Bulgaria by 2012
Bulgarian-Portugese joint venture company Mape Development plans to invest 150 million euro ($204.3 million) in the construction of six biomass-fueled power plants in Bulgaria by 2012. The plants will have a combined installed capacity of 30 megawatts, the company said in a statement. Mape Development plans to build the first biomass-fueled plant, a 25 million euro facility with a capacity of between five and 10 megawatts, in Panagyurishte in central Bulgaria, it said without providing a timeframe for the project. The Bulgarian market is among the most dynamically developing ones in Europe and provides good opportunities for the implementation of the company's strategy, its executive director Joao Caldeira said in the statement. Mape Development, set up in 2007 with headquarters in Plovdiv, the second largest city in Bulgaria, is also studying the opportunities for implementing tourism, logistics and industrial projects in the country. The Bulgarian-based company is part of the Portugal's consortium MAPA SGPS Group which develops biomass energy, tourism and golf projects.
Kraft Foods Bulgaria invests �800 000 in new coffee plant
The second largest food and beverage company in the worlds Kraft Foods is investing EUR 800 000 in a new coffee plant in Bulgaria's Kostinbrod, the company announced Monday. Kraft Foods Bulgaria thus become the first company in the country to employ a new technology for refrigerating coffee in order to preserve longer its aroma. With its new plant the company is planning to expand its coffee exports from Bulgaria by exporting its production to Romania, the Ukraine, Serbia, Macedonia, Croatia, and Slovenia. Kraft Foods Bulgaria also expresses its satisfaction with the repeal of the excise tax on coffee, which entered into force on January 1, 2009.Since it first entered the Bulgarian market in 1994 Kraft Foods has made substantial investments in its existing plants in the towns of Svoge and Kostinbrod.
Foreign Direct Investment in Bulgaria down by �1.2 Bln by End-August
Foreign direct investment in Bulgaria amounted to EUR 2,980.5 million (8.8% of GDP) for January – August 2008, compared to EUR 4,154.1 million (14.4% of GDP) attracted in January – August 2007, preliminary data of the Bulgarian National Bank (BNB) show. The attracted Equity Capital (acquisition/disposal of shares and equities in cash and contributions in kind by non-residents in/from the capital and reserves of Bulgarian enterprises and receipts/payments from/for real estate deals in the country) for January – August 2008 amounted to EUR 2,131.1 million, which was 71.5% of the foreign direct investment. It decreased by EUR 261.2 million compared to that attracted in the same period of 2007 (EUR 2392.3 million). The receipts from real estate investments of non-residents amounted to EUR 960.6 million compared to EUR 1,238.4 million for January – August 2007. The attracted equity capital on privatisation deals with non-residents (that have acquired over 10% of the equity in a Bulgarian enterprise) reported in January – August 2008 did not increase, compared to an increase of EUR 18.6 million in January – August 2007. The attracted equity capital on non-privatisation deals totalled EUR 2,131.1 million in the reporting period, compared to EUR 2,373.7 million for the same period in 2007. The other capital, net (the change in the net liabilities of the direct investment enterprise to the direct investor on financial loans, suppliers’ credits and debt securities) was positive, amounting to EUR 509.1 million in January – August 2008, compared to a net other capital amounting to EUR 1,512.3 million in the same period of 2007. It decreased by EUR 1003.3 million compared to that attracted in the same period of 2007. According to preliminary data, the Reinvested Earnings (the share of non-residents in the undistributed earnings/ loss of the enterprise) in January – August 2008 are estimated at EUR 340.3 million compared to EUR 249.4 million in the same period of the previous year. They increased by EUR 90.8 million in comparison with the same period in the previous year. By country, the largest investments in Bulgaria for the reporting period were those of Austria (13.9% of the total foreign direct investment), the Netherlands (11.3%) and Germany (10.7%). Direct investment abroad went up by EUR 403.4 million in January – August 2008, compared to an increase of EUR 125 million in January – August 2007, preliminary data show. The equity capital invested abroad in 2008 amounted to EUR 452.4 million, compared to EUR 135.8 million in January – August 2007.
Volvo Trucks invest BGN 8.6 M in 2008 in Bulgaria
Volvo Trucks are going to invest in a network of service centres in Bulgaria with plans to become number one on our market, the president of the company said while in Sofia as part of his east-European visit. Volvo truck sales in Bulgaria registered an unprecedented jump by 200% in 2007 and the market share is 21%. In 2008, BGN 8.6 million have been invested for the construction of the centres in Sofia, Bourgas and Plovdiv.
COMPANIES:
Three Bulgarian companies among 50 most dynamic IT firms in Central Europe
Three Bulgarian companies have been ranked among the fifty most dynamic IT companies in Central Europe in the Deloitte Technology Fast 50 ranking, darikfinance.bg reported. The ranking is based on the annual percentage growth of the income of the IT companies. The Bulgarian company with the highest rank is Universal K, which is a producer and provider of high-tech products for telecommunications companies. With an annual income growth of 1 393% the company is ranked fifteenth. The Bulgarian company Tehnologica is ranked 26th with an income growth of 624%, and Bulgaria's ITCE is ranked 48th with an income growth of 328% in 2007. For the first time in its nine-year history the ranking includes companies from nine Central and Eastern European states: the Czech Republic, Hungary, Poland, Slovakia, Romania, Bulgaria, Croatia, Serbia, and Estonia. The companies included provide products and services in the fields of software, Internet, communications, networking. For a third year in a row the leader in the ranking is the Polish Blue Media with a growth of 10 027%.
Several companies to represent Bulgaria at Fisheries Exhibition in Brussels
For the first time, several Bulgarian companies will represent the country at a world fisheries exhibition in Brussels, the Association of Producers of Fish Products in Bulgaria said Monday.The exhibition in Brussels is held on an annual basis. only one Bulgarian company took part in its latest editions.The exhibition offers an opportunity to conclude contracts on the import of new types of fish and fish products, the Association said.The Association also said that this month they will organize a series of seminars at which state administration officials will explain the conditions for applying, the preparation of projects and financing under the Operational Programme for Fisheries and Aquacultures.
Two new railway cargo companies in Bulgaria
Two Bulgarian companies got licenses for private cargo-carrying railway carriers: Gastrade from Sofia and Unitranscom from Bourgas. So far there have been only two other private freight railways. The Austrian Rail Cargo announced its intention to compete with BDZ national state carrier. Though the overall market share of private freight railways is only 6%, their appearance will influence positively the quality and price of the service.
8 firms compete for highway "Trakia"
A total of 8 firms participate in the contest for the construction of Lot 2 of highway "Trakia". The section includes the segment Stara Zagora - Nova Zagora.30 firms have bought documents as 9 of them have submitted offers for participation. Among the participants in the auction are "Constructing Engineering" - Croatia, "Alpine Bau" - Austria, the Greek "Aktor", onur" - Turkey, association "Zagora Trace", Association roads "Trakia", consortium "Zagora", "Shtrabak - ISA".Most of the firms present a bank guarantee for the amount of 1.2 millin levs, while the Turkish onur" offers 700 000 Euro.The prices offered will be accessible only to the firms, whose documentation corresponds to the technical criteria needed for the construction of Lot 2 of ‘Trakia".Earlier today Dimitar Kumyurdzhiev from the association "Transparency without borders" called upon for an outside control of the contests for a public order of a highway.
Stroyko 2008 houses 750 companies
Stroyko 2008, the biggest exhibition in the area of construction, architecture and furniture design, will be opened October 15-21 in Sofia. on all floors of the National Palace of Culture 750 Bulgarian and foreign companies will exhibit their production, 80 have asked for outside space for exhibition. one of the hits in this year's expo is heating appliances with infrared rays.
Yahoo! steps on Bulgaria’s online ad market
U.S. giant Yahoo! Inc. has teamed up with Bulgarian Internet media group Investor.bg to enter the local online advertising market. The move is backed by expectations that the Bulgarian online advertising market is tipped to gain speed, said Yahoo! sales manager for emerging markets, Marvin Liao. Internet advertising spoke for 3-4% of the Bulgarian market in 2007 against 15% in Western Europe, North Asia and the US. E-mail services hold out one of the best advertising opportunities in allowing targeting specific users, Liao said. Now Yahoo! reaches 580 million users a month on 38 markets around the globe via stringent advertising criteria barring misleading games and scrutinising all campaigns. The ongoing economic crisis is unlikely to slow down the growth of the Bulgarian online advertising market, which may well exceed 50% year-on-year and top BGN 18 million in 2008, forecast Investor.bg executive director Lyubomir Lekov. Investor.bg has a 12.5% market share.
Volvo to build truck centre in Plovdiv
Volvo Bulgaria said it would unveil in early 2009 a truck service centre and showroom in Plovdiv, Bulgaria’s second biggest city. The company has two centres in Sofia and one in Varna and Burgas each. It has invested BGN 8.6 million in Bulgaria this year and the new tab will follow the market’s moves. Volvo Bulgaria sold 487 trucks in the eight months through August, up 41% year-on-year. “The global financial crisis will affect the truck market, but we as a company have to adapt our European production operations to the new conditions as we did in the USA and cut costs,” Volvo Truck Corporation CEO Staffan Jufors said during his visit to Bulgaria adding the market wil be back on track within three years.
ANALYSIS:
Bulgaria is a tax paradise in EU
Author: Olga Yoncheva, money.bg
In the last five years the economic relations between Bulgaria and Austria grew significantly. This claimed in an interview for money.bg Mihael Angerer, trade councilor in the Austrian embassy in Bulgaria. Since the actual membership of Bulgaria in the European Union, and especially after 1998 the Austrian entrepreneurs found big investment potential in Bulgaria and invested in all sectors. Particularly high was the engagement in the financial and the insurance sectors, in telecommunications, energy and trade. The investors found the opportunity to invest in real estate, said also Angerer.
According to him, data from the end of 2007 shows that Austria has invested 5.2 billion euro and is investor N1 in Bulgaria. The trade between the two counties is developing well. Form 2004 to 2008 the Austrian export to Bulgaria has doubled.Therefore Bulgaria is among the strongest trade partners of Austria, claimed the Austrian trade councilor and continued that the Bulgarian export to Austria was also increasing partly with relation to the high Austrian and altogether foreign investments in Bulgaria in the last year.
To a question whether the Austrian investors could withdraw from Bulgaria because of the crisis, Mihael Angerer answered:
The Austrian companies look practically at the economic field. In the current year they continued to invest in the country. Along the financial crisis it can be expected that the Austrian investors will seek their chances for success in and out of the country. The Austrian economy is based on the small and medium enterprises, which are directed at long-term activity, also abroad. Our companies find big potential in the new EU member states. If the conditions for funding become more difficult, the Austrian companies will be interested in the Bulgarian growing market.
Here is some more from the interview Mihael Angerer gave for money.bg:
M: In which fields are the Austrian companies interested in?
M.A.: Lately there the interest of our companies in the field of production is increasing. The investment is mostly in the production of raw materials. There are new investments in the machine building, the production of metals and woods. The possibilities for the production of plastics and textile products are also used. The Austrian entrepreneurs see a big potential in the supply of technologies in the transport and the environment fields.
M: What is the position of the tax legislation?
M.A.: From my point of view Bulgaria is a tax paradise in the European Union. The low corporate tax and the 10% flat tax for physical people is extremely attractive for the Austrian investors. All in all, it is important to improve the framework conditions for the investors, such as transparency, improvement of the processes in the management and the jurisdiction, enhancement of the road infrastructure. These elements are decisive for Bulgaria's modernization and for the nearing of the life standard to the average on for the EU. The state institutions are expected to be fair and impartial in the economy.
M: Could renewable sources be an alternative of the nuclear energy? We know Austria emphasized a lot on them. There are also a lot of discussions on this issue?
M.A.: In Austria there are no nuclear plants. The water plants along the Danube and other rivers produce a significant part of the needed energy. Our country is developing also the production of energy from wind and biomass. Based on the proximity in topographic aspect, Bulgaria can also focus on alternative sources of energy, for example a future building of mountain dams. The Danube part between Bulgaria and Romania offers the possibility for the construction of two new river electric plants. The perspectives for using the wind and the sun for the production of energy are also perfect. The biomass usage also has great potential due to the big forests and the developed agriculture. To a large extent Bulgaria could satisfy its energy needs via renewable sources and be a model for the EU in this regard.