Sandor Richter: Bulgarian Government Needs Pressure to Fulfil EU Criteria

Novinite Insider » INTERVIEW | September 29, 2006, Friday // 00:00

Sandor Richter is a junior expert in the Vienna Institute for International Economic Studies. He was approached by Darik News on September 29 to comment the economical requirements of the EU for Bulgaria days after the official presentation of the monitoring report of the European Commission.

Tsvetana Minkova from Darik News talked to Sandor Richter*

Q: According to your study Bulgaria is the poorest country ever to join EU. What is the forecast for economic development after our accession on January 1, 2007?

A: We reckon with generally 4% to 5% GDP growth rate for the new members in the coming year. We actually calculate with growth rate of the EU 15, the old member states, and then add 2 % and that is roughly that growth rate which is available for the new member countries. And speaking of Bulgaria, in this range of 4-5% the 5% is more realistic than the 4% as for a lower level of development there are more opportunities to increase productivity and to achieve relatively high rate of growth.

Q: What will be Bulgaria's economical advantages as a EU member state?

A: The main advantage for Bulgaria to join EU will be the substantial amount of transfers coming from the joint EU budget, first for structural programs and regional development and there's a second group for agriculture, that is for agriculture - direct payment for farmers and rural development. So we calculated here in the institute that the magnitude of these transfers, and that is valid not only for BG, but for other new member countries is at least the same magnitude as it was for the Western European countries after World War II when the US provided the Marshal Plan. At that time it helped to reconstruct economical activities after the WWII destruction.

Q: How much money will Bulgaria receive?

A: I have here some rough estimations for the first period that is 2007 to 2009. Bulgaria and Romania will not be able to receive the whole amount of transfers in the first three years. Due to problems of absorbtion capacity EU decided to increase these transfers from year to year. This is the period for three years for increasing transfers and from the fourth year of membership both countries will get the available maximum support, so in this three years BG will receive around EUR 1,5 B annually. After this period these transfers will be higher and it seems so altogether for the period 2007-2013 Bulgaria will receive EUR 9 to 10 B

Q: Do you think Bulgaria has the potential to make all needed reforms so that the granted assets will not be partially freezed?

A: There are these special conditions. It is clear that some of the criteria for full membership have not been fulfilled by October 2006. Still EU decided to support the accession of Bulgaria and Romania but there are some safeguard clauses. To be sure that the missing compliance to the Acquis Communautaire will be fulfilled in the next few years, this potential threat of restrictions on transfers is there. Bulgaria will have to solve the homework in various fields from judiciary, fight against corruption and food safety. I think the task to solve is not something impossible, it may be difficult but I cannot imagine that in case of sincere efforts Bulgaria will not be able to fulfil these criteria

Q: Bulgaria has an agreement with the International Monetary Fund and the EU accompanying measures come into action. Does this mean Bulgaria is not prepared enough?

A: I think the EU would like to create some pressure to solve the problem with fulfilling the criteria. Without some menace of loosing the transfers perhaps the pressure would not be strong enough. In many cases it is easier for a government to implement reforms and institutional changes when there is pressure from outside.

*Translated By Lora Petrova, Sofia News Agency

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