Ivan Mihaylov: Bulgaria Should Be Active and Full-Fledge Member of the EU in All of Its Decision-Making Processes

Bulgarian businesses have been obliged to work during political uncertainty and even crisis in the past few years. These are periods of stopped time for all. However, these times bring stoppage of the reforms, lagging of digitalization, postponing of public procurement, etc.

Ivan Mihaylov addressed the current situation in a blitz interview with Dnevnik.bg, published on April 12, 2024.

Here are some of the key takes of the interview:

Business wants predictability in many directions, among the leading ones are legislation and frequent, hasty, and not well-discussed business changes, says Ivan Mihaylov, CEO of AmCham Bulgaria. Some EU directives are about to be transposed and their hasty implementation in our legislation would lead to poor postulates for business, he gives an example.

The organization believes that the accumulated political tensions will lead to populist promises (Easter pension increase, which is not in the Budget 2024), and will question the implementation of infrastructure projects. The most important loss that Bulgaria suffers with another political instability is related to the reputational damage with partners in the European Union, in NATO, as well as in our relations with our neighbors in Southeast Europe and with the US, Mihaylov stresses.

On the current political problems:

The focus will be on the “2 in 1” elections and much of the state and political resources will focus on them. This can sum up the immediate problem of business up to the vote. Mihaylov adds that the “swirling disinformation cannot be missed, with some experts also describing the situation as a “communications war for people’s minds”.

And business wants thinking people, with ideas about progress and innovation, hard work and dedication to family, community, and work, not – irradiated by conspiracy theories and politicians trading barbs through the media, Mihaylov points out.

The chamber expects that the period leading up to the elections will follow the momentum of the previous 9 months, pointing out that it would be ill-advised to undertake legislative changes that would not only directly disadvantage businesses financially, but through unnecessary regulation and bureaucracy.

The business point of view:

Mihaylov also shares the view that there is an element of business contraction with the frequent manifestations of political timelessness, but still, another political instability shakes the fragile trust built over the past 9 months. He points out that established businesses, which are good and significant employers, pay taxes and have corporate social responsibility programs and this will continue despite signs of stagnation in the EU, especially in Germany, which has been Bulgaria’s main trading partner for years.

On the export obstacles:

Every investor looks at the macro frame when deciding whether to export production or buy a company in a specific country, Mihaylov says.

“Simple EU membership and even the flat tax are not enough – we need to be an active and full member of the union in all its formats and decision-making processes.”

He points out that a chance to increase the competitiveness of the Bulgarian economy is not only given by investing in talent, supercomputers, and high-value-added products but also by an intelligent approach to the future of the EU’s Green Deal. Digitalization (the progress of which in recent years has been hampered by the frequent change of cabinets) would illuminate several still grey areas in the economy, import and export of goods from and through Bulgaria, he adds.

Eurozone Matters

Experts estimate the direct losses from currency conversion and unnecessary transaction fees at hundreds of millions per year, Mihaylov said when asked what losses the business will report if Bulgaria does not achieve its goal – to adopt the euro by 2025. Besides, he reminds us that there will be reputational damage – “we will be in the queue again, and we will hear ‘Romania has overtaken us’ on the air again, where justified, where not”.

Read the full Bulgarian version.