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Commenting article: Going for VAT Hikes in the Balkans. Or Love Thy Neighbor in Time of Crisis

If one is to give it some serious thought, the global economic and financial crisis has actually been rather beneficial for Bulgaria so far...

And it could become extremely beneficial if some smart policies have been/are adopted. What is more, by mid 2010, the effects of the economic crisis on Bulgaria's two fellow EU neighbors Romania and Greece is suggesting new important lessons for the country.

The crisis did put an end to several years of record economic activity in Bulgaria – with foreign direct investments reaching the record EUR 9 B in 2007, and the pretty decent EUR 6 B in 2008.

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#1
NellieotAmerica - 15 Jul 2010 // 01:58:43

"So by the fall of 2008 the Bulgarian economy was really overheated – to the extent that an economy run and staffed by Bulgarians can be overheated – that is, since, unfortunately, we don't rank very high in terms of labor productivity."

Truer words were never written.

"Not until we have the roads, the tunnels, the bridges, and the mutual understanding that one country's prosperity is the chance for another to become prosperous as well, and that one country's economic troubles are most likely to drag down the neighboring economy as well – a simple concept still lost to many in the Balkans."

Infrastructure is the backbone of civilization and Bulgaria doesn't have enough. As for the dragging down--I disagree. Why doesn't Germany get "dragged down" by its deadbeat neighbors? Why doesn't Apple Computers get dragged down by GM?

#2
CJB - 15 Jul 2010 // 10:32:54

Nelka

"As for the dragging down--I disagree. Why doesn't Germany get "dragged down" by its deadbeat neighbors? Why doesn't Apple Computers get dragged down by GM?"

According to the link you posted on the "Brazil" thread, BG last year had a positive balance of trade with Greece and Romania ie. exported more than imported. Greece is BG's biggest export market.

So, if Greece and Romania are in trouble, BG's exports will suffer: that's "dragging down".

Of course the stats don't reflect the black and grey economies, but much of the latter is Bulgarians working "informally" as cleaners just across the border in Greece. As these people are let go, watch the grey economy shrink too. Dunno how the heroin and people smuggling rackets are holding up, but if Western Europe's in the doldrums.....I guess at least the smackheads don't have a choice, they're addicted. The German, Austrian and British punters who visit Bulgarian hookers may cut down to save money so some "shrinkage" in that export market maybe.

#3
CJB - 15 Jul 2010 // 10:40:17

I suspect that most of the "heat" was coming from the numerous cups of coffee, and the tips of billions of cheap Bulgarian cigarette consumed by the Bulgarian "workers" on their frequent and lengthy "breaks". That and the hot air produced when millions of Bulgarians complain to each other about how "hard" they are having to "work".

Naturally very little was actually done despite the near full employment, hence the unfinished roads, hotels, offices sitting around looking derelict.

#4
DrFaust - 15 Jul 2010 // 12:02:38

"So, if Greece and Romania are in trouble, BG's exports will suffer: that's "dragging down"."

Wow, what an 'analysis'! Funny that the Bulgarian exports to Greece were skyrocketing exactly when the crisis hit Greece.

#5
CJB - 15 Jul 2010 // 12:33:47

"Wow, what an 'analysis'! Funny that the Bulgarian exports to Greece were skyrocketing exactly when the crisis hit Greece."

This just shows what a shallow minded idiot you are. As any fool knows, the crisis hit Greece properly near the end of 2009, and now the austerity in Greece is just beginning. Let's see how BG exports to Greece hold up after the cuts and unemployment start to hit the Greeks.

You are so economically illiterate it is almost painful to watch. I hope you are not in business, otherwise you will lose money big time!

#6
CJB - 15 Jul 2010 // 12:40:45

Fausten:

"Funny that the Bulgarian exports to Greece were skyrocketing exactly when the crisis hit Greece."

More proof (as if it were needed) of your idiocy. Exports skyrocketed in 2009? More like "declined substantially". Dumbkopf!

"Bulgaria's second largest individual trading partner, Greece, has imported 34,3% fewer Bulgarian goods and services; its exports to Bulgaria dropped by 32,4%. The decline is mostly due to the shrinking of the activity of Greek-owned Bulgarian firms in the textile and cement industry, among others."

http://www.novinite.com/view_news.php?id=104524

Now that austerity is hitting Greece, expect BG exports to drop like a stone.

#7
DrFaust - 15 Jul 2010 // 14:42:16

CJB,

wow, no 'Sieg Heil' or 'Arbeit macht frei', as usual in your messages adressed to me, you old Nazi? Just a lame and ridiculously spelt insult? You can do better?! LOL

Too bad you do not understand to read and interpret statistics, just like some of the SNA 'experts'. But anyway. Just what we know from you already...

Anyone who is a bit past your idiocy will clearly see the sharp rise of the Bulgarian exports to Greece when the first signs of the crisis appeared. The downfall in 2009 is just back to the pre-crisis level. I also could explain you why, but why should I make an effort to educate an idiot like you?

And by the way, I thought the Bulgarian statistics isn't worth anything, as you preach again and again, LOL.

#8
CJB - 15 Jul 2010 // 17:10:41

Fausten,

It seems your skull is so empty and hollow it is just like an echo chamber, except my words echo around all the nooks and crannies in your congenitally deformed head until distortions come back out, among the repeats.

Input: "Arbeit macht frei"

Output after Fausten hollow skull echo chamber processing: "Sieg Heil" AND "Arbeit macht frei"

Hmmm. Some form of low-level intelligence at work, enough to distort the signal and add a fictional component. Maybe something equivalent to a sea slug or other disgusting mollusc is inhabiting this empty skull?

"Too bad you do not understand to read and interpret statistics, just like some of the SNA 'experts'. But anyway. Just what we know from you already..."

You touching faith in statistics produced by corrupt and chaotic regimes borders on the lunatic.

"Anyone who is a bit past your idiocy"

You see, the echo chamber again.

"will clearly see the sharp rise of the Bulgarian exports to Greece when the first signs of the crisis appeared. The downfall in 2009 is just back to the pre-crisis level. I also could explain you why, but why should I make an effort to educate an idiot like you?"

Oh do explain, this should be entertaining. The sea slug school of economics, we are all waiting. Will it be as good as Paul the Octupus, we wonder?

"And by the way, I thought the Bulgarian statistics isn't worth anything, as you preach again and again, LOL."

Echoes, echoes. Oviously reading is not the sea slug's strong point. Read the report again, it cites Greek statistics. Not that these are any more trustworthy than their Bulgarian equivalent...

#9
CJB - 15 Jul 2010 // 17:55:13

On the "reliability" of Bulgarian statistics relating to international trade. Here is a lesson from recent history:

"The data pointing to sanctions breaking came to light because of a
unique situation in Bulgaria. Bulgaria was in a process of rebuilding
a democratic system after decades of repressive communist rule. The
economy was in transition from communism to a market system.
Economic agents lacked the sophistication to conceal immense un-
derground economic activities, especially in the sphere of interna-
tional trade. Political instability and corruption reduced the incentive
for economic agents to conceal such activities. In addition, govern-
ment officials had little experience at constraining underground ac-
tivity. Moreover, as Renwick (1981) observed, economic sanctions
could be painful to trading partners and neighbors of the receiving
country. Bulgaria was already undergoing a severe recession as a
result of the collapse of Comecon and compliance with the sanctions
imposed on Yugoslavia would have made the situation unbearable. "

http://www.cato.org/pubs/journal/cj22n3/cj22n3-8.pdf

Incredibly analysts found a mismatch of billions of dollars between what BNB was reporting and what customs officers were reporting!

No doubt the Bulgarian smugglers and money launderers have grown in sophistication since the early 1990s. Nowadays they run "legit" corporations like TIM...

But the lesson holds true: wherever there is a large inflow of goods and/or capital investment into Bulgaria, opportunities will be taken to indulge in "underground" activities. Perhaps these were better hidden during the recent "boom" in BG.

#10
DrFaust - 16 Jul 2010 // 07:45:25

CJB, a.k.a. Nazi troll,

trolling again, you statistics 'expert', who cannot tell the difference between a prehistoric and an actual one?

PISS OFF, retard.

#11
CJB - 16 Jul 2010 // 10:42:40

Is that the nest you have to offer, Sea Slug?

Pathetic! Nothing but the clunking sound of the hollow skull you made your home as you slither across the bed of your slime encrusted fish tank.

#12
CJB - 16 Jul 2010 // 11:35:05

I know you Sea Slugs don't hear so well, being underwater and everything. Let me repeat my request below. I can't wait to hear your echo (answer).

"will clearly see the sharp rise of the Bulgarian exports to Greece when the first signs of the crisis appeared. The downfall in 2009 is just back to the pre-crisis level. I also could explain you why, but why should I make an effort to educate an idiot like you?"

Oh do explain, this should be entertaining. The sea slug school of economics, we are all waiting. Will it be as good as Paul the Octupus, we wonder?

#13
Uchak - 16 Jul 2010 // 11:40:23

dr faust, i am sure you are all over the gay scandal in the German national football team..
which players do you think are gay?

I think Podolski, Mesut Ozil, and Keissling

#14
Bill - 16 Jul 2010 // 12:32:27

Uchak?

What "scandal" about gays on the German team? I haven't seen a word about it, and I live in Germany.

Podolski?s already a father, so I should think that lets him out.

#15
Hayawani - 16 Jul 2010 // 12:38:15

Bill,

"Podolski?s already a father, so I should think that lets him out."

You really are clueless!!!

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