Bulgaria: Hotels and Restaurants are on the verge of Bankruptcy due to Electricity Prices
The shock rise in electricity and fuel prices has led to bankruptcies of hoteliers and restaurateurs across the country. To support business, the Bulgarian Development Bank will provide BGN 60 million in the form of loans with preferential terms.
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Due to the severe economic crisis, Mihail Nikolov closed three of his restaurants in Varna. He says his electricity bills have tripled and revenues have fallen sharply as there are almost no customers.
"We do not live from our business at the moment, we live from savings. We do not make money with our business. In the last 2 years we live from loans, savings and credit," said Mikhail Nikolov, owner of restaurants.
Many other restaurateurs are in a similar situation. Many of them closed their establishments in early January.
"Some to wait for better times and others forever. Unprecedentedly difficult situation. The government did not comply with the proposal of employers' organizations for a threshold of the price of electricity, above which the state to help with 75 percent of the price," said Marin Sotirov, Deputy Chairman of the Association of Restaurants in Bulgaria.
The business support measure, approved by the Ministry of Tourism, provides for lending to small and medium-sized companies in the sector in difficulty. However, some restaurant owners are not convinced that the new program will help them survive.
"This is a standard loan. With collateral, with interest, really slightly better interest rates, with a small grace period. But this is another non-working product with a wishful nature," said Mikhail Nikolov - owner of restaurants.
In order not to go bankrupt, the owners of restaurants are forced to raise prices. They say that the most difficult thing is to find the balance between the real price of the product and the amount that the customer is willing to pay.
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