Bulgaria

REFERENCES

Commission Opinion [COM(97) 2008 final - Not published in the Official Journal] Commission Report [COM(98) 707 final - Not published in the Official Journal]Commission Report [COM(1999) 501 final - Not published in the Official Journal]Commission Report [COM(2000) 701 final - Not published in the Official Journal]Commission Report [COM(2001) 700 final - SEC(2001) 1744 final - Not published in the Official Journal]Commission Report [COM(2002) 700 final - SEC(2002) 1400 - Not published in the Official Journal]Commission Report [COM(2003) 676 final - SEC(2003) 1210 - Not published in the Official Journal]Commission Report [COM(2004) 657 final - SEC(2004) 1199 - Not published in the Official Journal]Commission Report [COM(2005) 534 final - SEC(2005) 1352 - Not published in the Official Journal]

Treaty of Accession to the European Union [Official Journal L 157 of 21.06.05]

SUMMARY

In its Opinion of July 1997, the Commission considered that Bulgarian industry would have serious difficulties in the medium term in integrating into the European market, and that a major restructuring and privatisation effort was required in several sectors.

The November 1998 Report noted that progress has been made thanks to the Government's structural reform programme. However, many sectors continued to face problems in restructuring and adapting to market conditions. The main objective continued to be to accelerate the privatisation process in order to establish a competitive industrial structure.

The October 1999 Report confirmed that Bulgaria was continuing to make progress in this area but nevertheless stressed the need to establish a coherent industrial policy strategy. The report also noted that the privatisation process was not proceeding as fast as expected. The small and medium-sized enterprises (SME) sector was continuing to make progress but additional efforts still needed to be made.

The November 2000 Report found that good progress was being made with the structural reform, but that Bulgaria still had to make improvements to the business environment, bankruptcy procedures and enterprises' access to loan capital.

The November 2001 Report stated that Bulgaria was continuing its efforts to devise an industrial policy and to create an environment which was favourable to the creation and development of small and medium-sized enterprises.

The November 2002 Report reported on the progress made by Bulgaria towards introducing an industrial policy and a policy in favour of small and medium-sized enterprises.

The November 2003 Report noted that Bulgarian legislation was generally in line with the Community acquis. It did, however, need to focus more on completion of the privatisation process, enhancement of the business environment, the coordination of administrative structures and the effective implementation of an SME policy.

The October 2004 Report highlighted the new progress made by Bulgaria. Whilst, on the whole, it complied with EU industrial policy, Bulgaria nevertheless had to make continuing efforts to complete its preparation for accession.

The October 2005 Report noted that Bulgaria should be in a position to implement the Community acquis on industrial strategy from its accession. It nevertheless had to continue efforts to observe its commitments, especially with regard to privatisation and restructuring.

The Treaty of Accession was signed on 25 April 2005 and accession took place on 1 January 2007.

COMMUNITY ACQUIS

EU industrial policy seeks to enhance the competitiveness of enterprises, as well as rates of employment and living standards and. It aims to promote, within the European Community, an environment which is conducive to initiative, to the creation and development of enterprises (particularly SMEs), to industrial cooperation, and to exploiting the industrial potential of innovation, research and technological development policies. With this in view, Community strategy consists, on the one hand, of designing policy principles and, on the other hand, of producing horizontal and sectoral industrial policy communications. EU industrial policy borrows instruments from other Community policies, some related to the operation of markets (product specification and market access, trade policy, state aid and competition policy) and others related to industry's capacity to adapt to change (stable macro-economic environment, technology, training, etc.).

In order to cope with competitive pressure and market forces within the Union, the industry of candidate countries needs to have achieved a certain level of competitiveness by the time of accession. The candidate countries need to be seen as pursuing policies aimed at open and competitive markets along the lines set out in Article 157 of the Treaty. Cooperation between the European Union and the candidate countries in the fields of industrial cooperation, investment, industrial standardisation and conformity assessment as provided for in the Europe Agreement is also an important indicator of development in the right direction.

EVALUATION

Bulgaria has made significant progress since the Commission's 1997 opinion and its industrial strategy now broadly complies with the principles of European industrial policy. Bulgaria's industrial policy has become stable, predictable and market-based. The privatisation and restructuring process has moved forward considerably. Bulgaria has also improved the business environment, consolidated the banking sector and attracted foreign investment. Furthermore, it has strengthened its administrative capacity, particularly due to a restructuring of the Ministry of the Economy.

In order to complete its preparations for accession, Bulgaria must continue its efforts in developing an industrial policy which promotes growth and innovation to strengthen economic competitiveness. The strategy adopted in 2002 thus needs to be updated. The completion of the privatisation and restructuring process still remains a priority. Bulgaria must in fact fully implement its privatisation strategy and complete its restructuring of the steel industry. In addition, it needs to continue to strengthen its administrative capacity.

This chapter has been provisionally closed. Bulgaria has not requested transitional arrangements and has met its commitments (see 2002 Report).

Bulgaria generally meets the requirements of the accession negotiations concerning small and medium-sized enterprises (SMEs). Since the Commission's 1997 opinion, Bulgaria has made progress with regard to its SME policy, particularly due to the more stable economic conditions, reduction in the tax burden and the enhanced business climate. Bulgaria has been participating in the multiannual programme for enterprises and entrepreneurship for SMEs since 1998 and has signed up to the European Charter for Small Enterprises adopted in March 2000. A strategy aimed at improving the business environment for the period 2002-2006 was also adopted in March 2000. Bulgaria has since continued its efforts to enhance the business environment and improve access to finance. It has also adopted a new SME law which guarantees better coordination of SME policies, provides a definition for SMEs (a definition which does not comply with Commission recommendations) and sets up an executive agency within the Ministry of the Economy.

Bulgaria's efforts to complete its preparations for accession still, however, need to be maintained. It must thus improve the coordination of the implementation of SME policy, fully align its SME definition with the European definition and continue to implement the European Charter for Small Enterprises.

This chapter has been provisionally closed. Bulgaria has not requested transitional arrangements and has met its commitments (see 2002 Report).

Last updated: 08.02.2006