Bulgarian businesses are facing significant financial losses due to delayed membership in the eurozone and Schengen area, missing out on billions in export potential. An analysis by Allianz Trade, a global leader in trade credit insurance, reveals that Bulgaria’s exports could grow by 5.8% annually upon eurozone entry. Trade in goods is expected to rise by 3.3%, while services could see an even larger increase of 8.4%. If 2023 export data serves as a baseline, this delay translates to a missed opportunity worth .6 billion. Additionally, businesses continue to incur transaction costs that would decrease with the adoption of the common currency.

Experts project that eurozone membership will lead to a reduction in tariff equivalents of -1.4% for goods and -3.1% for services, resulting in an annual GDP boost of 0.2%. Similarly, joining the Schengen area is expected to have a notable impact. The removal of customs controls at Bulgarian and Romanian borders could lead to a GDP increase of 0.17%. Allianz Trade estimates that, even before full Schengen accession, Bulgaria already benefits from its trade with European partners, with this contributing approximately 1.5% to GDP annually. Following accession, the overall positive effect could raise this figure to 1.6-1.7% from 2025 onwards.

The removal of border controls is anticipated to reduce border crossing times by an average of 20 minutes, facilitating smoother trade flows. The simultaneous accession of Bulgaria and Romania to Schengen is forecast to drive an annual export growth of 10.5%, with goods increasing by 8.5% and services by 12.5%. Experts estimate that if Bulgaria had joined Schengen in 2023, the trade volume would have been at least .3 billion higher.

Accession to both the eurozone and Schengen is expected to stimulate exports and enhance foreign trade opportunities for Bulgarian companies. These developments open doors to new partnerships and market expansion. However, businesses must remain vigilant against risks such as late payments and bad debts. Kamelia Popova, manager of Euler Hermes in Bulgaria, now operating under the Allianz Trade brand, advises companies to seize these opportunities while carefully assessing their partners and using tools like trade credit insurance for additional protection.

Schengen membership is also expected to bring additional benefits by reducing tariff equivalents by -1.7% for goods and -1.5% for services. This reduction, combined with streamlined border processes, will further support Bulgarian businesses in strengthening their trade activities and tapping into the benefits of integrated European markets.

Source: Allianz Trade