German investors in Bulgaria are representatives of the most powerful economy in Europe and their view of the development of the business environment in this country can be considered a litmus test. The German-Bulgarian Chamber of Industry and Commerce is a sort of speaker for these investors. A reason to speak to the head of the Chamber Dr. Mitko Vassilev is also a recent ceremony at the Sofia Opera, where for the eleventh time the companies that contributed most during the year to the development of Bulgarian-German economic relations received awards.

At a recent meeting with the government, representatives of American, French and German investors in Bulgaria had the opportunity, along with the owners and senior management of leading companies in this country to get acquainted with the latest developments in Bulgaria and the European Union.

"It was good to know about the plans of the government,” says Mitko Vassilev. "A meeting of this kind cannot be expected to bring great results but it is important to have such meetings and dialogue, especially in this difficult situation. There are a number of problems to be solved, including the case with the Corporate Commercial Bank, the reform in the judicial system and the administration, corruption, etc.”

A traditional survey among the 500 members of GBCIC for the first time last year showed sharp criticism regarding the conditions for foreign investors in Bulgaria. The polled pointed out the dysfunctional administration and legal system, corruption, insufficient transparency of public procurement procedures, etc. What has been the effect of the past two years of political and economic instability in Bulgaria on the business climate?

"The effect is not good. If we look at official data of the BNB, we would see outflow of German investors for yet another year. But there were also positive aspects: the tax system, the geographical location of the country, the fact it belongs to the large family of EU and NATO, and the cheap labor are all attractive to foreign investors. It is important to work together; otherwise we are going to lag behind.”

It seems that after Bulgaria became EU Member State the investment boom waned. This process is natural as being a member of the EU Bulgaria has a predictable market.

Despite the outflow of German investments in the country, the trade turnover between the two countries has marked a new record. What is the explanation?

"We were also surprised to find out in October that trade turnover increased.  In 2013 it reached 5.3 billion euro, while for 2014 the level might reach € 5.6 billion, which is true record. We have never had such a growth, but probably there would be no trade surplus. Germany is the world champion in exports and a few countries in the world have positive trade balance with it. But the mere fact that trade turnover continues to grow is a positive trend,” says Mitko Vassilev.

English: Alexander Markov