Politico: Leaner, Cheaper Bulgaria Out-Competing Greece

Views on BG | August 7, 2015, Friday // 11:34
Bulgaria: Politico: Leaner, Cheaper Bulgaria Out-Competing Greece Photo by BGNES

In times of crisis Greece, which "for years grew fat on easy money", must now watch "its poorer, leaner neighbor to the north further compound its deep, almost existential, despair", Politico magazine writes.

Bulgaria, which at the beginning of the same text is described as "a leaner, cheaper country" which "out-competes the Greeks", has been the focus of a special report (part of the Politico Road Trip series) titled Greece vs Bulgaria in which the author travels to a Greek region close to the border with Bulgaria to explore the economic situation there.

"Greece is in crisis, but Bulgaria is still poorer — its GDP under half that of Greece. It remains far, far cheaper. And this difference... is having a profound effect on this region of Crisis Greece," he explains.

Due to increased taxes, however, "Greek products are now much more expensive. They are not competitive so they are exporting less. Since Bulgaria joined the EU its products have come into direct competition with Greece. The country has smaller production costs so its products can be sold more cheaply," an employee of a Greek Ministry of Tourism office 50 km from the Bulgaria-Greece border, is quoted as saying.

In his words, around 2500 Greek companies have now moved to Bulgaria and are employing some 350 000 Bulgarians as a way to "save money and survive", benefiting from lower wages, cheaper transport and infrastructure, and lower level of red tape. This comes against the backdrop of regulations imposed on Greece under arrangements with European lenders as part of the solution to the country's debt crisis.

Local businesses in regions near the border are suffering as Greeks make trips across the border to buy goods in Bulgaria, another tourist office employee says. A pack of cigarettes, for instance, is worth EUR 4 in Greece ad EUR 2.80 in Bulgaria.

On the other hand, while the goods in Bulgaria "may be cheaper... the quality is much worse," the first employee adds.

Traveling further, to a village near the border, a farmer explains his activity has been affected by dry weather, and state subsidies that have been suffering delays for years, along with occasional deviation of EU funding that is "often swallowed up by bureaucracy".

Apart from shortage in funding, he cites "increased competition from Bulgarian farmers" whose raw materials and wages are much cheaper "so they can produce much more cheaply than Greek farmers."

Politico's entire article is available here.

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Tags: greece, Bulgaria, crisis, agriculture, subsidies, goods, border
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