Almost EUR 16 billion will enter Bulgaria’s economy over the next EU programming period 2014-2020, indicates Bulgaria’s Partnership Agreement with the European Commission, officially presented at the end of last week by caretaker Deputy Prime Minister in charge of European funds Iliana Tsanova. This is more than EUR 4 billion up on the 2007-2013 period. By 2020, the effect of this money is expected to bring about an almost 9 percent growth in the GDP, private investments are expected to increase by almost 43 percent and public investments – by 32 percent, employment – by 6 percent and the average wages – by over 37 percent. With foreign investments greatly diminished due to the crisis, this is a tremendous opportunity for the country’s sustainable development. But it may also entail quite a lot of risks connected with the reform potential in problem-ridden sectors such as health care, education, the pensioning system, before the European funding can be made use of.

Are there any pitfalls in Bulgaria’s new agreement with the EU? Deputy Prime Minister Iliana Tsanova:

“I wouldn’t say there are pitfalls. To my mind, the challenge is that we must really and truly meet the commitments of reform we have assumed, as the Partnership Agreement will be implemented by no less than two governments. And I am excluding the caretaker cabinet. For these reforms and policies to be put through there must be continuity. We cannot afford to be always starting from scratch - that is no way to carry out reform. That is no way to attain sustainability in these sectors. To my mind, that is the biggest risk. I very much hope the European Commission will be a good partner to all sides implementing the agreement and will put us back on the right track if we digress.”

By 2020, Bulgaria will have received EUR 10 billion from the EU just for the operational programmes. Do we stand to lose real money if we fail to go through with the reforms? Iliana Tsanova:

“The reform in the “Water” sector for example, is certainly closely linked with resources under the Operational Programme Environment. Unless we complete it by 2016, i.e. if we fail to accomplish what the amendments to the Water Act envisage, then the governing authority, for example the European Commission, will be in its rights to suspend interim payments until we give a clear indication what will happen from then on. In health care we have also assumed commitments to put through reforms. It is a question of dialogue on how we can uphold what we have achieved so far and how effectively we have been making use of these resources. This strategy has been adopted, as has a plan of action. It should not be forgotten that any strategy preceding or describing these steps must be approved by the European Commission. This means we shall be informed by the Commission whether it agrees with what we are doing or not. But what ultimately matters is to take these practical steps so as to be able to use this money effectively.”

Bulgaria’s payments to the EU’s general budget amount to EUR 900 million a year. This country has to provide additional national co-financing amounting to 15 percent of the European subsidy envisaged before it can absorb it. What are the benefits?

“Obviously, Bulgaria’s benefits are many times greater than what we pay to the European Commission,” says Deputy Prime Minister Iliana Tsanova. “The challenge here is to be able to make maximum use of what the Commission is envisaging.”

Have we been able to absorb the funding over the past 7-year period?

“This is the first time Bulgaria has been implementing operational programmes,” Iliana Tsanova says. “The implementation is not brilliant but it is not all that bad either. According to current data the country is 4^th from the bottom up, but is ahead of countries like Romania, Croatia and Italy. I hope that the lessons we have learnt in that time will serve as a warning in future. We have built a capacity and we can continue from there on. That is what the Commission is paying the Bulgarian institutions for. I hope there will be the will to do better over the next programming period. These European funds are very important to us. Foreign investments shrank drastically in the period before the crisis. At this point in time 70 percent of the public investments at the municipalities are from EU funds. So we should do our best to take advantage of this opportunity and invest them in top quality projects, instead of just spending the money.”

On the whole, there is no risk to the funding under the operational programmes for the period until 2014, Iliana Tsanova says further. The only risks concern the suspended OP Regional Development and Environment, she adds. But in her words, we can avoid or at least reduce these risks if we start immediate payments from the national fund, so the money may start circulating and the country may receive certificates.

English version: Milena Daynova