This chapter examines Bulgaria’s current challenges and ongoing reforms. It looks at various indicators which, taken together, determine the country’s ability to attract investment. It also summarises various measures that can be taken to improve the investment climate in the country, notably by investing in innovation and infrastructure projects, addressing skills shortages, implementing SOEs reforms and enhancing competition policy.
OECD Investment Policy Review: Bulgaria
OECD Investment Policy Reviews
3. Bulgaria in transition: Challenges and opportunities
Abstract
Introduction
Achieving the ambitious long-term strategic vision of more inclusive and sustainable goals for all citizens is one of the top priorities of Bulgaria’s 2030 National Strategy. In this respect, foreign investment can generate positive socio‑economic and other benefits in Bulgaria that help make progress towards sustainable development. Under the right conditions, foreign direct investment (FDI) can enhance growth and innovation, create quality jobs, develop human capital, raise living standards and strengthen regional development. Realising these gains is not a given, however. While, in principle, foreign investment has the potential to advance sustainable and inclusive development, the policy context plays a critical role.
This chapter looks at actions taken by Bulgaria to improve the investment climate and make the country more attractive to foreign investment. It focuses on ongoing reforms, challenges and opportunities in sectors such as innovation, physical and digital infrastructure, skills and competition, which good functioning is a prerequisite for attracting long-lasting investment. Other chapters in this Review will examine how reforms in various policy areas can further promote investment.
The innovation system
Foreign investment can benefit a host economy. The policy context nevertheless plays a critical role in realising this potential. In this line, the host country’s innovation policy can drive foreign investment, offering business opportunities for international and domestic investors.
Attracting more and better investment, including FDI, was a focus of the National Development Programme (NDP) Bulgaria 2020. For instance, under priority 5 (Support of innovation and investment activities to increase the competitiveness of economy), sub-priority 5.1 focused on the creation of conditions for developing an institutional environment in favour of innovations, and investments in products and services with high added value and high technologies, as well as the development of the small and medium-sized Enterprises (SMEs) sector. Priority 6 aimed at strengthening the institutional environment for higher efficiency of public services for citizens and businesses. Such policies have been seen as contributing to enhancing economic growth, reaching higher R&D expenditure share in GDP, increasing investments in tangible fixed assets, attracting FDI, and accelerating productivity growth.
Bulgaria has since adopted the NDP BULGARIA 2030, the main strategic document in the hierarchy of the national programming documents, which determines the vision and overall goals of development policies in all sectors of government, including their territorial dimensions (EC/OECD 2021, STIP Compass Bulgaria Overview). The document sets out three strategic goals, five development areas (axes) and 13 national priorities in which attracting more and better investment and consolidating efforts on innovation policy remain Bulgaria’s priority. According to the Programme, “efforts to build capacity and develop human resources in the R&D system will continue, with interventions focusing on enhancing the attractiveness of scientific careers and attracting and retaining scientists and researchers”. In addition, “co‑operation between higher education institutions, research institutes and businesses will be stimulated to effectively gear R&D towards the needs of the market and society, as well as to increase their value added by harnessing the synergies arising from such cross-sectoral links”.
Bulgaria also adopted a National Research Strategy “Better Science for Better Bulgaria 2017‑30” and an Innovation Strategy for Smart Specialisation aimed at fostering innovation (Bulgaria, 2017a). The National Roadmaps of research infrastructure (NRRI) development have also been important for implementing national research and innovation strategies. Bulgaria’s NRRI, adopted in 2010 (Council of Minister, Decision No.692), defined the national needs in relation to research infrastructure (RI). In 2014, the NRRI was updated (Council of Minister, decision No.569 of 31 July 2014) to support the National Research Strategy “Better Science for Better Bulgaria 2017‑30” and address the priorities under the Innovation Strategy for Smart Specialisation.
Yet, Bulgaria’s research and innovation (R&I) system suggests that Bulgaria continues to face challenges such as insufficient modern infrastructures, lack of skilled human resources and weak science‑business linkages, irregular territorial and thematic distribution of the RI, financial instability of companies as well as inadequate engagement of the private sector (Bulgaria, 2017b, NRRI). These shortcomings have been assessed by the EC as hampering the potential development of Bulgaria and contribution of R&I to economic growth and investment attraction (EC, 2020a).
Box 3.1. Main innovation national strategies and policy initiatives
National strategy
Bulgaria’s National Strategy for Development of Scientific Research 2017‑30 sets up the new R&I targets for Bulgaria in line with the Europe 2020 strategy and defines priority areas for the development of scientific research in the country.
Policy initiatives
National Roadmap for Research and Infrastructure: the roadmap is one of Bulgaria’s key instruments for implementing the national research strategies for development aligned with the EU priorities. The roadmap supports the policies defined in the National Research Strategy “Better Science for Better Bulgaria 2017‑30”; addresses the priorities under the Innovation Strategy for Smart Specialisation.
Institutional funding for a public research initiative to Support the Bulgarian Academy of science with an estimated budget expenditure range per year between EUR 50‑100 million.
Sofia Tech Park is a state‑owned company creating the first science and Technology Park in Bulgaria with the mission of realising projects fostering the development of the research, innovation, and technological capacity of the country.
Source: EC/OECD (2021), STIP Compass Bulgaria Overview, generated from https://stip.oecd.org/stip/countries/Bulgaria on 25 June 2021.
Despite an increase of 7.2% between 2014 and 2021 in the 2021 European Innovation index, Bulgaria was rated as among the worst performers (emerging innovators)1 according to the European Innovation Scoreboard 2021 (EIS, 2021), with an overall level below 70% of the EU average. According to the Scoreboard, with a score of 50.1, Bulgaria ranked second from the bottom to the top among the EU‑28 countries. As far as Gross Domestic expenditure on R&D (GERD) as a percentage of GDP is concerned, in 2019, Gross domestic expenditure on R&D (GERD) in Bulgaria amounted to only 0.75% of GDP compared to average spending of about 2.5% of GDP found in the OECD countries and 2.1% in the European Union (Figure 3.1).
Figure 3.1. Gross domestic expenditure on R&D (GERD) – Bulgaria in comparative perspective
Note: Gross domestic expenditure on R&D (GERD), totals all expenditure on inputs used in performing R&D, in a given territory. For OECD member countries, zone totals (OECD and EU), Argentina, the People’s Republic of China, Romania, the Russian Federation, Singapore, South Africa and Chinese Taipei: OECD, Main Science and Technology Indicators Database, http://oe.cd/msti. For Bulgaria, Cyprus, Croatia and Malta data (if available): OECD calculations based on Eurostat, Statistics on Research and Development. For other countries: OECD calculations based on UNESCO Institute for Statistics (UIS) data.
Source: MSTI database (March 2021), www.oecd.org/sti/scoreboard.htm.
Bulgaria’s innovation performance differs from region to region. According to the Regional Innovation Scoreboard 2021 (a regional extension of the European Innovation Scoreboard), Bulgaria’s performance has increased across all regions compared to 2014. Still, in 2021 all six regions in Bulgaria were emerging innovators, of which Yugozapaden – the capital region (South West) is the best performing one, whereas Severozapaden (North West) continues to be the worst-performing region in the country (Table 3.1).
Table 3.1. Regional innovation Scoreboard 2021 – regional performance in Bulgaria
Note: Regional Innovation Scoreboard 2021 – Relative performance to EU in “2 014”.
Source: Regional Innovation Scoreboard (2021) database.
In 2021, Bulgaria’s performance related to innovation improved by 7.2% compared to 2014. According to the 2021 edition of the EIS, intellectual assets, employment impacts, and environmental sustainability were the strongest innovation dimensions. Environment-related technologies, design applications, and trademark applications scored relatively high, above the EU average. The country was nevertheless still underperforming in areas such as finance and support and the attractive research system with the lowest score in the EU. Bulgaria’s lowest performance has been in R&D expenditure in the public sector, enterprises providing ICT training, public-private co-publications, lifelong learning, and most-cited publications. Bulgaria directs half of the entire business sector’s R&D investment to large multinational companies (EIS, 2021). The low levels of public and private investment in R&I, fragmented public science base, lack and ageing of skilled human resources, weak science‑business linkages, and ineffective governance have been identified as remaining challenges for the potential role of R&I in boosting the productivity of the Bulgarian market and attract foreign investors. Putting in place competitive salaries for researchers would help attract well-qualified Bulgarian and foreign talent and address the problem of the ageing research community and shortages (OECD, 2021a).
All possible efforts should be undertaken by the national authorities to significantly increase Bulgaria’s public funding of R&D in order to reach a level that should be well above that of the past decade. To be successful, these R&I investments should be accompanied by structural reforms with regard to the research and innovation system to boost efficiency and quality. In this respect, stronger participation of businesses to encourage investments in the innovation sector would be welcomed. The OECD Guidelines for Multinational Enterprises, in Chapter 10 on Science and technology, include recommendations that aim to promote the diffusion by businesses of the fruits of research and development activities among the countries in which they operate. Businesses are notably encouraged to perform science and technology development work, develop ties with local universities, public research institutions, and participate in co‑operative projects with local industry or industry associations. Bulgaria has an opportunity to leverage the Guidelines to involve businesses in the development of innovative capacities, including through the implementation of RBC principles and standards.
The state of infrastructure
The Infrastructure sector is of paramount importance to Bulgaria as it is vital to the country’s economic growth, inward investment and international competitiveness. Quality infrastructure helps businesses compete and grow, attract and keep foreign investors, and maintain a high quality of life for the population. Failure to invest in infrastructure means a failure to sustain economic and social development.
Bulgaria has made substantial efforts to modernise and build sustainable infrastructure as a strategic factor for the success of the economy. In particular, the long-awaited EU membership has allowed the country to benefit from EU funding for infrastructure projects. As a result, in the past decade, infrastructure including communication infrastructure, has improved. Nonetheless, Bulgaria still suffers from a poor perception of the state of public infrastructure, as revealed by its 101 position out of 141 countries in the 2019 Global Competitiveness Report, with a score of 3.4 out of 7 (WEF, 2019).
Bulgaria’s road infrastructure has improved but still has a way to go
For the past decades, the government has taken important steps to improve Bulgaria’s physical infrastructure and connectivity by investing in motorways and road projects. According to data of Bulgaria’s National statistical institute (NSI, 2019), Bulgaria’s national road network length reached 19 879 kms of which the motorways accounted for 790 kms. In October 2015, Bulgaria completed the Maritsa Motorway project. Trakia, Maritsa, and Lyulin motorways were entirely completed with total lengths of 360 kms, 117 kms, and 19 kms respectively (KPMG, 2017). An important part of Bulgaria’s motorway projects, such as Struma2 motorway and sections of Hemus3 motorway, are under construction.
Despite this progress, the country still suffers from an inadequate road infrastructure as revealed by its 26th position out of 28 countries in the 2020 EU Transport Scoreboard focusing on the Trans-European Transport Network (TEN-T). According to it, Bulgaria was one of the worst EU performers along with Croatia and Romania (EC, 2020b). Of particular note have been the unequal distribution and the insufficient connectivity of Bulgaria’s roads at regional level (Table 3.2). For instance, only 18 kms of motorways pass through the North-West region whereas 454 kms of motorways pass through South-West and South-Central Bulgaria. It should be recalled that South-West Bulgaria is among the poorest regions among EU countries and hence, the least attractive for foreign investors. Lack of road maintenance and poor pavement quality are particularly pronounced in some northern regions, which increases travel time (OECD, 2021a). In addition, the road infrastructure is struggling to keep up with the demand, which is due to a steady rise in traffic and in car ownership, which has increased with 60% for the 2017 and 2019 period (EBRD, 2019).
Another weak spot has been investors’ low trust in the public procurement process for infrastructure projects. According to investors that the OECD Secretariat met during its fact-finding mission in the framework of this Review, contracts would sometimes be given to companies amidst procedural irregularities and tailor-made award criteria.4 For example, in 2016, a publication on a leading investigative journalism website reported a number of irregularities with respect to the mountain section infrastructure project between Separeva Banya and Panichishte (5 kms), in particular as regards its alleged disproportionate funding, the participation of questionable companies, the use of cheap construction materials despite the high financing of the project and a number of invoiced activities that had not been fulfilled.5
Table 3.2. Regional distribution by road category 2019
Notes:
1. Designed for long-distance transit (mainly from border to border).
2. Designed for transit movement over medium distances.
3. All other republican roads that do not enter in Category I and II.
Source: National Statistical Institute (2019), www.nsi.bg/en/content/7203/national-road-network-road-category.
Bulgaria’s railway network needs further improvement
Efficient rail transport services and infrastructure is necessary not only to support investment in all Bulgaria’s regions but also to allow social and territorial inclusion. As most physical infrastructure investment has gone into roads, there is still an important gap in railways quality in Bulgaria despite recent efforts made by Bulgaria to modernise its railway network, notably as part of the investment plan and priorities set out in the “Programme for the development and operation of the railway infrastructure 2019 – 2023“.6 According to the 2019 Global Competitiveness Report, Bulgaria’s quality of railroad infrastructure decreased from 3.3 (one worst and seven best) in 2018 to 3.1 in 2019.
Although the bulk of the rail network is composed of double‑track and electrified ways with a total length of 4 030 kms,7 the operational and technical condition of the railway infrastructure is poor. Considerable parts of the railway lines have been constructed more than 50 or 60 years ago, for speeds up to 100 km/h. As a result, it takes approximately eight hours to go by train from Sofia to Burgas (an approximate distance of 400 kms), almost twice long as by car. In terms of extension, the insufficient rail network connections with neighbouring countries, such Greece, Romania, Serbia and Türkiye, has been assessed as creating obstacles for trading with them (EC, 2019). There is also currently no railway link with the Republic of North Macedonia (the rail link between Sofia and Skopje should be completed in 2025‑27).
Ramping up investment in Bulgaria’s railway network is therefore crucial, not only to sustain robust rates of economic growth and integrate more fully the country into regional and global value chains but also to ensure greater social inclusiveness. In this respect, foreign investment and financial assistance from international organisations can help. For example, with respect to the latter, the EU, in November 2018, allocated EUR 293 million to fund the modernisation of the railway connection between two of Bulgaria’s biggest cities, Plovdiv and Burgas.8 For the period 2015‑19, the annual funding from the EU dedicated to railway infrastructure was estimated at approximately EUR 140 million according to the 2014‑20 Operational Programme on Transport (OPT). To ensure inclusiveness of all regions, Bulgaria will need to further provide support to investments in lagging behind regions. For instance, for the use of the EU funds, in the next programming period (2021‑27), Bulgaria is already reinforcing the regional approach promoting integrated investment. It provides opportunities to pool resources of the OPT with other Operational Programmes (OPs) to support regional programmess, which can direct funds in a more place‑based approach (OECD 2021, Decentralisation and Regionalisation in Bulgaria). As Bulgaria’s economy will likely continue to grow in the post COVID‑19 phase, donor financing will likely decline, underlying the need for Bulgaria to mobilise additional resources, notably from the private sector.
The investment required to improve Bulgaria’s rail network is also an opportunity for the government to promote infrastructure investment projects, which can have positive impacts on Bulgaria’s society, including lower environmental impacts and better well-being of Bulgarian’s inhabitants. Indeed, certain infrastructure projects may have negative impacts on sustainable development, which can range from conflicts with communities over land, water, and resettlement, to unsafe working conditions during construction or significant environmental (including climate change). In line with the OECD Guidelines for Multinational Enterprises, Bulgaria should encourage enterprises to conduct due diligence with a view to identify, prevent, mitigate, and account for how they address their actual and potential adverse impacts, including in the course of investment in infrastructure. The OECD Due Diligence Guidance for Responsible Business Conduct provides practical support to enterprises on the implementation of the Guidelines. In addition, the OECD Policy Framework for Investment and the OECD Principles for Private Sector Participation in Infrastructure (OECD, 2007) encourage governments to clearly communicate RBC expectations to their private partners.
Bulgaria’s digitalisation is lagging behind OECD standards
The deployment of digital economy has reshaped the traditional global business and investment landscape. As illustrated by the COVID‑19 crisis, the digitalisation of business operations is an opportunity for investors to protect themselves from supply-chain disruptions. The deployment of new digital tools, such as blockchain technology for supply change management and machine learning for tracking risks, can not only boost country’s economic growth but also enable businesses to further comply with the RBC standards.9 Nevertheless, with these opportunities come new challenges that governments need to address carefully. The digital transformation is changing the nature and structure of investment and raising concerns about social equity and inclusion, as well as privacy and data protection. Against this background, Bulgaria could establish itself as one of the leading European countries in terms of digitalisation and attract a new generation of intangible FDI.
Bulgaria has a modern legal framework on data protection and privacy, aligned with EU law. The right to privacy is a constitutional right recognised and protected by the Constitution of the Republic of Bulgaria (Article 32 para.1, Constitution of the Republic of Bulgaria). The main legislative act that governs data protection and privacy in Bulgaria is the General Data Protection Regulation (Regulation (EU) 2016/679) (GDPR). Bulgaria implemented the EU Data Protection Directive 95/46/EC by updating the 2002 Personal Data Protection Act (PDPA) in February 2019. The PDPA as amended in 2019, implements the GDPR into Bulgarian legislation and also transposes Directive (EU) 2016/680 of the European Parliament and of the Council of 27 April 2016, on the protection of natural persons concerning the processing of personal data by competent authorities for the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and the free movement of such data, and repealing Council Framework Decision 2008/977/JHA. The supervisory authority in charge of performing tasks and exercising powers under the GDPR and the PDPA is the Commission for Personal Data Protection (CPDP). The Inspectorate to the Supreme Judicial Council supervises the processing of personal data by the courts, prosecutors, and investigative bodies in their capacity as judicial authorities.
For the past ten years, the Bulgarian authorities have made important efforts in the direction of the country’s digital transformation. For example, in November 2019, Bulgaria adopted a National Programme “Digital Bulgaria 2025” as well as a roadmap for its implementation, both setting out the conditions for building an innovative digital infrastructure. In July 2020, the Council of Ministers of the Republic of Bulgaria approved the National Strategic Document “Digital Transformation 2020‑30 Programme” focusing on digital transformation for growth. In December 2020 Bulgaria’s Ministry of Transport, Information Technology, and Communications (MTITC) adopted the “Concept of the development of Artificial Intelligence in Bulgaria until 2030” which is the country’s national Artificial Intelligence (AI) strategic document. The connectivity of Bulgaria’s population has also improved considerably over the past ten years. For instance, mobile broadband subscriptions increased in Bulgaria from 13 in 2009 to almost 29 in 2019.10 Yet, these figures are still lower compared to the OECD countries, where the number of subscriptions grew from 32 subscriptions per 100 inhabitants in 2009 to almost 113 subscriptions per 100 inhabitants by June 2019 (OECD, 2020a).
Despite Bulgaria’s ambitious programmes aimed at establishing the country as one of the EU leaders in terms of speed of mobile and internet networks, there are still some obstacles that need to be addressed. In 2020, Bulgaria was ranked last (out of 28 countries) in the Digital Economy and Society Index (DESI) with an overall score of 36.4 (out of 100) compared to the EU average of 52.6 (out of 100). Bulgaria performs relatively well in connectivity, specifically as regards the wide availability of ultrafast (i.e. 100 Mbps or higher and mobile broadband networks)11 (EC, 2020c). Approximately 67% of Bulgarians use the Internet (compared to 85% EU average) while 24% have never used it which is the highest percentage among all EU member states. According to the 2021 OECD economic survey of Bulgaria, household usage rates in the country are still relatively low, and in some regions, only about 60% of households have internet access (OECD, 2021a).
The COVID‑19 crisis has further underlined the importance of digitalisation and innovation not only for the functioning of the economy but also for the protection of people’s health and welfare. Digital technologies, such as mobile and biometric applications and online learning platforms, are being adopted in innovative ways to improve the effectiveness of government front-line responses to COVID‑19 and to ensure continuous education for children and students. While disclosures of personal information can help the public to identify potential COVID‑19 infections and track the spread over time, current digital solutions for monitoring and containment have varying implications for privacy and data protection (OECD, 2020b).
The enforcement of social distancing, lockdowns, and other measures in response to the COVID‑19 pandemic have disrupted Bulgaria’s market and economy. In this regard, Bulgaria has made additional efforts for enhancing digitalisation and improving the information exchange between the institutions and citizens (Box 3.2).
Regarding data relevant to the economic recovery during the ongoing COVID‑19 crisis, Bulgaria is lagging compared to its EU peers in the introduction of 5G network,12 the digital skills, and the digitisation of business indicators. In the deployment of the high capacity networks (VHCNs),13 Bulgaria ranked 20th out of 28 countries in 2020, and its performance in digital public services was still relatively weak (EC, 2020d). Building up investment in Bulgaria’s digital infrastructure networks is therefore crucial, to not only sustain robust rates of economic growth and integrate more fully the country into regional and global value chains but also to ensure greater social inclusion in Bulgaria’s post-COVID‑19 context.
In order to overcome the challenges created by the development of the digital economy and, at the same time, to attract FDI projects, Bulgaria should consider taking additional steps to address the digital skills shortcomings in the country for both individuals and businesses by providing trainings and increasing financial resources for the less advantaged socio‑economic groups in the country. In addition, Bulgaria could also take further actions to ensure the implementation of its digital programme and ensure more supportive mechanisms for digitisation projects.
Box 3.2. The COVID‑19 crisis and the importance of digitalisation in Bulgaria
In response to the COVID‑19 crisis, Bulgaria launched two projects underlying the importance of digitalisation and access to the Internet to preserve the functioning of the health and education sector. Still, Bulgaria needs to address two major concerns – i) how to ensure broad access to digital technologies so that all children can exercise their rights, and ii) how to mitigate against increased risks for data privacy violations that may arise out of the increased use of COVID‑19 applications, and e‑learning platforms.
In April 2020, Bulgaria approved the ViruSafe mobile application developed by Bulgarian IT specialists. The application was created to assist society and governmental institutions in the fight against COVID‑19. ViruSafe allows users to track their symptoms and health status. If necessary, users can share their health status with practitioners or with the national health authority. The Bulgarian Ministry of Health is now working on the introduction of a National Health Information System to enhance the effectiveness of the institutions. Yet, concerns have been raised concerning the lack of information on whether the COVID‑19 application had undergone independent audit in terms of data security and data protection.
Shortly after the declaration of the state of emergency in Bulgaria in March 2020, amendments to the Electronic Communications Act (ECA), introduced the possibility for the Ministry of the Interior to monitor the telephone numbers of those who do not observe quarantine without restrictions and only subsequently to notify the court of this. In April 2020, a group of Members of Parliament challenged before Bulgaria’s Constitutional Court (CC) the amendments to the ECA allowing the Ministry of Interior to obtain access to traffic data. The applicants claimed that the provisions represented disproportionate interference with the right to privacy and the confidentiality of correspondence and communications as defined in the Constitution, the European Convention of Human Rights, and the EU Directive on privacy and electronic communications. In November 2020, Bulgaria’s Constitutional Court (CC) ruled that the preventive collection of traffic data on location for six months constitutes a serious, disproportionate intrusion into the right to privacy and protection of personal data.14
In March 2020, 89% of Bulgaria’s students were enrolled in the e‑learning platform launched just a few days after Bulgaria’s state of emergency was announced. School education content has been also broadcasted through the national television channels BNT 2 and BNT 4. To support distance learning, the Ministry of Education and Science (MES) has developed a National Electronic Library of Teachers (e‑Content Repository), which provides materials for pedagogical specialists for working in e‑learning environments. A 2020 study of the Institute for Research in Education (IRE) on the impact of distance learning on the quality of education showed Roma children were less prepared for the transition of schools to distance learning. According to the research, about 64% of schoolchildren speaking the Romani language at home had a smartphone, only 21% had a computer, and just 50% had internet access. These figures are significantly lower than the share of those speaking the Turkish language (79%, 46%, and 72% respectively) or the Bulgarian language at home (95%, 70%, and 84% respectively).
Source: World Bank (2020), www.worldbank.org/en/topic/edutech/brief/how-countries-are-using-edtech-to-support-remote-learning-during-the-COVID-19-pandemic, European Union Agency for Fundamental Rights (2020) https://fra.europa.eu/sites/default/files/fra_uploads/bg_report_on_coronavirus_pandemic_-_may_2020.pdf.
State‑Owned Enterprises reform
State‑owned enterprises (SOEs) still represent a large part of the economy in Bulgaria and many of them are at local level: by 2016, according to OECD data, there were 581 fully or majority-owned municipal enterprises, compared to 350 SOEs at the central level. The latter provide utility services (electricity, gas), transport and other community services, e.g. waste management, water supply, cultural centres, etc. In spite of the rapid privatisation of businesses in the 1990s and 2000s (Table 3.3), Overall, Bulgaria retains control over some of the most important economic sectors of the country such as energy, water, health care and transport services.
The privatisation process in Bulgaria started in 1992 with the adoption of the Law on Transformation and Privatisation of State and Municipal Enterprises and the establishment of the Privatisation Agency (PA). The Law divided SOEs into three categories depending on their value, and the Privatisation Agency was responsible for the privatisation of the largest enterprises while line ministries were in charge of the privatisation of the smallest enterprises.
In 2019, according to Bulgaria’s National Statistical Institute (NSI), more than 300 SOEs were under the central government and 580 were under the sub-national government units, including municipalities.15 More than 200 central SOEs were under line ministries control. Bulgaria was also a minority shareholder (10‑50% stake) in 41 enterprises through different ministries such as the Ministry of Agriculture, Food and Forestry, the Ministry of Energy, the Ministers of Economy, and the Ministry of Health. Hospitals and medical centres account for around half of SOEs in Bulgaria (OECD, 2019a).
Table 3.3. Waves of privatisation
Note: Authors’ elaboration.
Source: Multiple data sources and context analysis.
Table 3.4. The presence of the State in Bulgaria’s economy and its peers
Note: Authors’ elaboration based on the OECD Product Market Regulations Indicators database (2018). The OECD has developed a range of indicators of product market regulation at both the economy-wide and sectoral levels. All of these indicators measure the extent to which policy settings promote or inhibit competition in areas of the product market where competition is viable.
Source: Product Market Regulations (2018).
Table 3.5. List of largest SOEs in Bulgaria in 2019
Source: OECD (2019).
Given the importance of SOEs in Bulgaria, SOE’s performance has been an area of concern. Weaknesses in SOEs’ governance has been pointed out by multilateral governmental organisations as implying risks for economic and financial stability (IMF Article IV Report 2016). Economic losses, poor governance, insufficient transparency, monitoring and control, the non-competitive selection process for the board of directors, and frequent board management changes have been seen as among the main issues of the SOEs sector in Bulgaria (OECD, 2019a). In addition, exposure to the risk of political patronage, conflict of interest, and corruption including bribery of SOEs employees by other parties or the risk of employees and board members using their positions for gaining a personal advantage for themselves have been viewed for a long time as a challenge (OECD, 2019a).
In order to defuse concerns about weak governance and potential risks of corruption, significant legislative and regulatory changes have been introduced to enhance the performance, transparency and integrity of SOEs. For example, in 2017 Bulgaria introduced new provisions in the Accountancy Act, according to which enterprises, including all SOEs, are required to draw up non-financial declarations describing environmental, social, employees, human rights and anti-corruption-corruption policies (Article 48, Accountancy Act). The Law on Public Enterprises adopted in 2019 further specifies that SOE board members cannot hold a “senior public office” or be a member of a political cabinet or a municipality’s secretary. The state ownership regulations for fully corporatised SOEs and the Counter-Corruption and Unlawfully Acquired Assets Forfeiture Act (CCUAAA) also contain disposition on anti-corruption and integrity in SOEs boards and provide a definition of conflict of interest (CCUAAA, Chapter 8) as well as a requirement that board members sign a “Declaration of Assets and Interest”, which is to be regularly updated (Article 22 of the state ownership regulations). Certain SOEs are also obliged to develop internal regulations for potential conflicts of interest within their boards (OECD, 2019a).
Overall, strengthening SOEs governance has become one of the top priorities for Bulgaria. Reforms aimed at improving the governance and fostering the integrity of SOEs have advanced rapidly in Bulgaria for the past few years. As part of its ERM II and Banking Union accession commitments, Bulgaria started a legislative reform process to improve the governance of SOEs by revising and aligning its legislation with the OECD Guidelines on Corporate Governance of State‑Owned Enterprises.
In support of Bulgaria’s reform process, in 2018 the European Commission and the OECD began to implement an improving the governance of state‑owned enterprises in Bulgaria project. With such support, Bulgaria adopted in late 2019 an entirely new law, the Law on Public Enterprises (LPE), which addresses the main issues of SOEs practices in the country as identified in the 2019 OECD Review of the Bulgaria. The LPE has been assessed as being in line with the OECD Guidelines on corporate governance for SOEs, incorporating international standards for corporate governance including stronger ownership, co‑ordination, accountability, qualification for the managing bodies, independence, and transparency in their nomination, disclosure and publicity obligations, to address the main weaknesses of the SOEs governance in Bulgaria (OECD, 2019a).
At the central level, the new legislation applies to fully and majority-owned SOEs and their subsidiaries, except for the Bulgarian Development Bank. Stricter requirements may be required for large SOE as defined in Chapter 2, Section I and II of the Accountancy Act. Chapters 2, 5, 6, and 7 of the LPE apply to municipal level SOEs. The LPE has also transformed the Agency for Privatisation and Post-privatisation Control into the Public Enterprises and Control Agency (PECA), giving the PECA an additional role of monitoring and policy co‑ordination body (Box 3.3).
Box 3.3. Public Enterprises and Control Agency’s new role under the Law on Public Enterprises
Art. 11. (1) The Agency for Public Enterprises and Control shall act as a unit responsible for the co‑ordination of state policy with regard to public enterprises and shall monitor and report its implementation to the Council of Ministers. (2) The Executive Director of the Agency for Public Enterprises and Control shall be accountable to the Council of Ministers and shall work under the supervision of the Prime Minister or a Deputy Prime Minister appointed by the latter. (3) Persons with higher education – a master with at least 10 years of professional experience in the field of finance, state governance and/or the sector of real economy, of which at least three years at a managerial position, shall be appointed members of the Executive Board of the Agency for Public Enterprises and Control.
Art. 12. The Public Enterprises and Control Agency shall carry out the functions under Article 11(1) by:
1. developing the policy in the field of state shareholding in the capital of public enterprises
2. monitoring the implementation of the policy in the field of state shareholding in the capital of public enterprises and preparing its updating
3. assisting the authorities exercising the powers of the State in formulating the general strategic objectives of the enterprises and the key financial and non-financial performance indicators in the business programmes of the enterprises
4. monitoring the activities of public enterprises and preparing an aggregate report for the previous year in the format and scope defined by law
5. co‑operating with other state administrations, non-governmental and international institutions on issues related to the management of public enterprises
6. publishing updated information and reports on the activities of public enterprises, incl. financial and non-financial information on the enterprises
7. monitoring the competitive selection procedures and the procedures for the appointment of the members of the management and control bodies
8. evaluating the implementation of the approved business programmes of public enterprises and making proposals for improving their management
9. exercising the powers of the State in public enterprises when delegated by the Council of Ministers
10. on request, assisting the municipalities with regard to the management of municipal public enterprises
11. preparing an assessment and analysis of the approved business programmes of public enterprises and their implementation as well as recommendations regarding the risks and effects on public finances, including the potential effects and risks for the consolidated debt and deficit/surplus indicators of the State Governance Sector
12. giving instructions on the application of this Law.
Source: Law on Public Enterprises (2019),
The establishment of a co‑ordination unit in the face of the PECA has been assessed by the OECD as being in line with the OECD SOEs Guidelines and as responding to the need to improve the decentralised SOE model in Bulgaria in which 17 ministries oversee a portfolio of 221 SOEs (OECD, 2019a). In addition, the LPE introduces new requirements with regards to selection criteria for board members such as reputation and integrity, suitable education, and solid professional experience amongst other aspects (Art. 20(1), LPE). The LPE also contains minimum requirements for independent members on SOE boards, which must constitute at least 1/3, but not more than half of board composition and introduces independence requirements (Art. 23(1), LPE).
The Bulgarian Development Bank (BDB), which is a state‑owned financial institution in charge of financing companies and projects in support of national economic development, is the only SOE exempted from the LPE’s scope because it is subject to regulations and supervisory rules governing financial institutions. The proposal for its exclusion came from deputies between the first and second reading of the LPE draft. In July 2019, the Minister of Finance submitted an opinion, according to which such an exclusive approach towards the BDB contradicts the main purpose of the LPE.16
For a long time, Bulgaria’s Development Bank, a financial institution 99.9% owned by the Bulgarian state, has been pointed as a vulnerable SOE because of its management (IMF, 2017). After adopting the LPE, the Bulgarian authorities kept working with the OECD on the adoption of a secondary legislation. In these lines, Bulgaria promulgated PECA’s rules of procedures.17 In parallel, the OECD also supported Bulgaria’s legislative and institutional reform efforts by providing administrative and technical support in developing the new “Rule of Implementation of the Law on Public Enterprises” which was adopted on 30 April 202018 and came into force in May 2020.
Both the implementing Rules for the LPE and PECA’s rules of procedures have been assessed by the OECD as being in line with the OECD SOE Guidelines’ principles and as further enhancing the legislative foundation for more effective ownership co‑ordination and monitoring of the SOEs in Bulgaria (OECD 2019). It can reasonably be argued that the steps taken by Bulgaria are moving in the right direction. Bulgaria’s governance system for SOEs is nevertheless work in progress. Reforms are expected to take time to permeate through the system. For example, the OECD, in its report on corporate governance of SOEs in Bulgaria (OECD, 2019), noted that not all SOEs in Bulgaria were consistently establishing internal controls, ethics and compliance measures including those dedicated to preventing corruption as recommended in the OECD Guidelines for Multinational Enterprises, the OECD SOE Guidelines and the OECD Anti-Corruption and Integrity Guidelines for State‑Owned Enterprises. The report further noted that the government had not yet established or communicated specific expectations concerning SOEs’ compliance with RBC standards. The OECD is currently providing additional technical and legal assistance to PECA on the implementation of the Law and related regulations.
Labour market and skills
Bulgaria’s low employment costs as well as its EU membership have played an important role in attracting investors. Because of Bulgaria’s steady economic growth since 2015, the country recorded historically high employment rate of 72.4% (for the group of people between 20 and 64 years old) in 2018, with an unemployment rate of 5.2% (EC, 2020d). A mismatch between the labour market needs and workforce skills and availability has nevertheless been identified as a challenge by foreign and domestic investors met in the course of this Review (Box 3.4).
Box 3.4. Mismatch priority occupations in Bulgaria
Shortage occupation in Bulgaria
ICT Professionals
Teachers
Health Professionals
Engineering professionals
Financial and mathematical professionals
Sales and purchasing agents and brokers
Administration and business services professionals
Surplus occupation in Bulgaria
Street Workers
Workers in mining, construction, transport and manufacturing
Cleaners and helpers
Agriculture, forestry, fishery
Regional disparities also remain high. Some regions in the country are less attractive for investors for numerous factors, not only because of poor infrastructure as discussed above but also with respect to inadequate educational characteristics of the workforce. Such characteristics vary across regions and are more pronounced in the least advanced ones such as the North-West. In 2020, the North West region recorded a 13.3% unemployment rate compared to a 5.2% national average unemployment rate for the Bulgarian population in the 15‑64 age group.19 Policies should push for relevant vocational courses, digital and administrative skills training to meet the market needs not only on central but also on a regional level.
Bulgaria, like many countries in Central and Eastern Europe, has experienced higher educational attainment (such as years of education and level of education completed) following an upward trend since the start of country’s economic transition. The level of educational attainment, however, is not necessarily a proxy for measuring actual skills, as proven by performance in international student assessments that measure cognitive skills such as PISA. Scores reveal that Bulgarian youth accumulates poor cognitive foundation skills, which leaves them ill prepared for the demands of a competitive, innovation-driven economy. The gap is the widest in reading literacy, the main topic of PISA 2018, where 15‑year‑olds in Bulgaria score 420 points compared to an average of 487 points in OECD countries. Girls perform better than boys in Bulgaria do, with a statistically significant difference of 40 points. Social-economically advantaged students outperformed disadvantaged students in reading by 106 score points in PISA 2018. This is larger than the average difference between the two groups (89 score points) across OECD countries (OECD, 2018).
Another weak area in terms of labour and skills in Bulgaria has been the insufficient integration of the Roma minority, which makes up one‑tenth of Bulgarians and which lives in socially excluded neighbourhoods (EC, 2020c). Facilitating access to the labour market of the Roma population, in particular young Roma women, whose labour inactivity is to some extent due to the cultural peculiarities of this ethnic group, could contribute to greater labour market participation. Implementation of responsible business conduct (RBC) principles and standards by businesses could help in that regard.
Notwithstanding the recent decline in the share of young people who are neither employed nor enrolled in training or education programmes, the early school leavers’ proportion remains high. Bulgaria also records a low level of individuals with above basic overran digital skills. According to the 2021 European Innovation Scoreboard, Bulgaria ranked second from the bottom to the top among the EU‑28 countries, scoring below neighbouring non-EU countries such as the Republic of North Macedonia and Serbia. The tertiary higher education level alignment with labour-market demand remains limited. Although Bulgaria has made progress with respect to vocational education and training (VET) reform, yet the employment rate in VET remains low (European Commission, 2020c).
The brain drain, i.e. the departure of skilled nationals, is another problem plaguing Bulgaria, affecting all sectors its national economy and labour force. Since the 1990s, Bulgaria has experienced a huge dip in its population, falling from nearly 9 million in 1989 to less than 7 million in 2019.20 Current forecasts predict that by 2050 the population will have shrunk by another quarter – a projection so high that the country is neck-and-neck with countries such as Lithuania for the fastest shrinking population in the world.
There is scope for improving the quality and the inclusiveness of education and aligning it to the needs of the labour market. Bulgaria’s labour and skills shortages constitute a significant obstacle to the creation of a favourable investment climate. Government spending on education for increasing teacher’s salaries, to make the best professionals stay in the country, as well as modernisation of the education system, would help address current shortcomings.
In terms of policy responses to alleviate brain drain, there is some promising evidence that suggests governments can successfully encourage the return of their high-skilled diaspora by putting in place “returning scientists programmes” to attract scientists back to their home country for temporary stays (brain circulation) or permanent returns. Another way to attract Bulgarian experts is to make use of scientific diaspora networks by connecting scientists abroad to the scientific community at home countries. The return of high-skilled professionals could also be supported by granting tax incentives to returning emigrants.21
The entry of young and highly qualified people into the education system would improve the knowledge and skills that students acquire. In addition, of particular concern are the extremely high rates of unemployed (formal) or untrained (NEET) youth among the Turkish and Roma populations, while the share of NEET among ethnic Bulgarians is close to the EU average (OECD, 2021a). Establishing a better dialogue between business and education institutions is a key step for making their curricula adequate concerning labour market needs.
Market functioning: Enhancing competition policy
Over the past decades, Bulgaria has undertaken a series of steps in the field of market functioning, establishing a strong legal and institutional framework for competition policy. Bulgaria has a modern legal and institutional framework aligned with the EU norms and standards.
Bulgaria’s main legal instruments on competition include the Protection of the Competition Act (PCA), adopted in 2008 and which has been designed to protect and foster competition and free enterprise in economic activity. The law protects against agreements, decisions and concerted practices and regulates abuse of stronger bargaining power on the market, and any other actions and operations which may result in prevention, restriction or distortion of competition in Bulgaria and/or affect trade between EU Member States, as well as against unfair competition or against abuse of dominant position when contracting (Article1, PCA). The scope of the Act is large and comprises every kind of undertakings, which carry out their activities within or outside Bulgaria if they explicitly or tacitly prevent, restrict, distort or may prevent, restrict or distort competition in the country (Article 2, PCA). The PCA also regulates merger control aligned with the EU merger control regime and applies equally to foreign and domestic mergers. The central body responsible for ensuring the protection and creating conditions for the development of competition and free enterprise is the Commission on Protection of Competition (CPC, the Commission), an independent state agency.
Although steps undertaken by Bulgaria in the area of competition policy have been welcomed by the OECD (OECD 2019b), the enforcement of the Competition Law has been perceived by some international investors met by the OECD Secretariat in the framework of this Review as being sometimes inconsistent or, as suggested by some authors across the Bulgarian media, prone to political influence. One of the controversial cases concerning the consistency of Bulgaria’s competition watchdog practice has been the PPF/Nova case in the context of which the CPC prohibited the acquisition of the largest media conglomerate in Bulgaria, Nova Broadcasting Group AD, by PPF, owned by a the Czech businessperson. The CPC decision came under criticism for its alleged lack of valid economic arguments, despite the use by the Commission of the SIEC (“significant impediment of effective competition”) test that the European Commission also uses when applying the EC Merger Regulation.22 For some observers,23 it was not clear how the CPC concluded that the acquisition of Nova would lead to a strengthening of PPF’s dominant position on the relevant markets. The CPC claimed that the transaction would impede effective competition, but the acquiring entity, reportedly, had only a negligible presence on the market where their activities overlapped (0‑5%). In addition, in its prohibition decision, the CPC underlined the significant power of Nova, but allegedly failed to explain how this position would change if the acquisition by an insignificant market player was cleared.
Alleged or actual inconsistent decisions may have a chilling effect on investment decisions and economic activity. From an investor’s perspective, a level playing field is crucial for Bulgaria’s investment climate attractiveness. In this regard, despite limited financial resources, Bulgaria should maintain its efforts aimed at strengthening the institutional capacity of the Commission as a regulator, notably by providing additional training to its officials and case handlers in the framework of competition law proceedings (infringements of competition law and merger cases). At the time of writing this Review, Bulgaria was in process of changing its Protection of the Competition Act to transpose into Bulgarian legislation the provisions of Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 aimed at empowering the competition authorities of Member States to be more effective enforcers. With the transposition of the Directive provisions on the financial independence of EU competition authorities in to the PCA, the Competition Commission expected that it would found itself in a better position to obtain additional financial resources for professional training of the CPC expert staff.
Outlook
Fifteen years after becoming an EU member state, Bulgaria continues to face challenges despite significant efforts to improve the country’s overall investment climate. As part of EU membership requirements, Bulgaria’s legal and institutional framework for investment has gradually become aligned with EU norms and standards. For example, substantial progress has been achieved with respect to the SOEs sector through the adoption of an entirely new Law aligned with the OECD standards.
Issues such as ageing population, brain drain and weak integration of national minorities have nevertheless been perceived as areas of concern by investors. Bulgaria’s insufficient state of infrastructure (both road and railroad) has been another issue for businesses. The COVID‑19 context has also highlighted the importance of digitalisation and innovation where Bulgaria’s performance is still lagging compared to many of its EU peers and OECD countries.
In order to overcome the above‑mentioned challenges, Bulgaria should consider pursuing specific policies. For example, it seems necessary to improve investment in infrastructures. There is also the need for Bulgaria to keep working on securing the inclusiveness of its education system both at the central and regional level. There is also scope, as recognised by Bulgaria’s Commission for Protection on Competition, for enhancing its institutional capacity as a regulator, notably by strengthening the skills and competencies of its officials and case handlers on competition law enforcement. Despite progress in reforms aimed at strengthening the governance of SOEs, given that they are still present in some key sectors of the economy such as railways and the postal service as well as in the energy, health care and infrastructure sectors, additional steps in line with the OECD Guidelines on Corporate Governance of State‑Owned Enterprises should be taken to ensure a stronger level playing field. Bulgaria has an opportunity to leverage its standards and practice in the context of its work with the OECD Competition Committee.
References
Bulgaria (2021), National Development Programme Bulgaria 2030, www.minfin.bg/upload/43546/Bulgaria+2030_EN.pdf
Bulgaria (2020), National Development Programme: Bulgaria 2020
http://www.strategy.bg/StrategicDocuments/View.aspx?lang=bg-BG&Id=766.
Bulgaria (2017a), National strategy for development of scientific research in the Republic of Bulgaria 2017 – 2030 – Better science for better Bulgaria
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Bulgaria (2014), Innovation Strategy for Smart Specialisation 2014‑20,
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https://stip.oecd.org/stip/countries/Bulgaria on 25 June2021.
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European Commission (2020d), 2020 European Semester: Assessment of progress on structural reforms, prevention and correction of macroeconomic imbalances, and results of in-depth reviews under Regulation (EU) No 1176/2011, https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1584543810241&uri=CELEX%3A52020SC0500.
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Eurostat (2019), Regional Innovation Scoreboard 2019, https://ec.europa.eu/growth/sites/growth/files/ris2019.pdf.
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Notes
← 1. According to the 2021 European Innovation Scoreboard, the group of emerging innovators includes seven Member States that show a performance level below 70% of the EU average. This group includes Bulgaria, Croatia, Hungary, Latvia, Poland, Romania, and the Slovak Republic.
← 2. Struma motorway is a part of Pan-European Corridor IV, the EC Priority Project No. 7 as well as the TENT network on the Bulgarian territory. The motorway begins from the end of Liulyn Motorway (approximately 20 kms south-west of Sofia at Daskalovo Junction) and ends at the border crossing with Greece at Kulata. See https://keep.eu/projects/17403/.
← 3. Hemus motorway starts from the Sofia Ring Road and ends in Varna. It is a part of extended TEN-T. The sections Yana – Yablanica, and Belokopitovo – Varna are already completed. At the time of writing of this Review, two sections were under construction – from Sofia Ring Road to Yana (8.5 kms) and from Kaspichan to Belokopitovo (8 kms). In 2020, the section from Sofia Ring Road to Yana (8.5 kms) and from Kaspichan to Belokopitovo (8 kms) was still under construction. See https://keep.eu/projects/17405/.
← 4. See www.fnf-southeasteurope.org/our-work/black-book/black-book-of-government-waste-in-bulgaria-eu-edition/the-myth-of-cheap-bulgarian-roads/.
← 6. Available at: www.mtitc.government.bg/sites/default/files/pril_1_pet_god_programa_2019_2023_s_prilojeniya_of.pdf.
← 8. See www.mtitc.government.bg/en/category/1/ec-allocates-293-million-euro-plovdiv-bourgas-railway-line-modernization.
← 9. See www.oecd.org/investment/investment-policy/The-digital-economy-multinational-enterprises-and-international-investment-policy.pdf.
← 10. International Telecommunication Union (ITU) World Telecommunication/ICT Indicators Database https://data.worldbank.org/indicator/IT.NET.BBND.P2?locations=BG.
← 12. 5G will support simultaneous connections, increase masse capacity, and deliver multi-Gbps peak rates and ultra-low latency. 5G is the fifth generation mobile network succeeding 4G, which was still being deployed in Bulgaria in 2021. The fifth generation of wireless networks, or 5G, is intended to meet the IMT‑2020 specifications. That is, 5G is being developed with three main generic use case scenarios: enhanced mobile broadband (eMBB); massive machine type communications (mMTC); and critical communications/applications (Ultra-reliable and low latency communications, URLLC) (OECD, 2019). It is intended to support simultaneous connections, increase masse capacity, and deliver multi-Gbps peak rates and ultra-low latency.
← 13. Article 2(2) of the European Electronics Communications Code EECC defines the term ‘very high capacity network’ as follows: “’Very high capacity network’ means either an electronic communications network which consists wholly of optical fibre elements at least up to the distribution point at the serving location, or an electronic communications network which is capable of delivering, under usual peak-time conditions, similar network performance in terms of available downlink and uplink bandwidth, resilience, error-related parameters, and latency and its variation.”, available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018L1972.
← 14. Constitutional Court of the Republic of Bulgaria, Resolution No 15 17 November 2020 (Promulgated SG, issue 101 of 27.11.2020), http://www.constcourt.bg/bg/Acts/GetHtmlContent/871b6834-64cd-47b3-9fbd-5a9fc570a96d.
← 15. Note that in 2019 the NSI reports different numbers than the 2019 OECD Review of Bulgaria as they count also other entities, which would not typically, fit within the category of SOE.
← 16. See “MEPs removed BDB from stricter rules for public companies”, Kapital, 26 September 2019, www.capital.bg/politika_i_ikonomika/bulgaria/2019/09/26/3968585_deputatite_izvadiha_bbr_ot_po-striktnite_pravila_za/.
← 17. CoM Decree No 68 of 13 April 2020, https://lex.bg/bg/laws/ldoc/2137202005.
← 18. CoM Decree No 85 of 30 April 2020, https://dv.parliament.bg/DVWeb/showMaterialDV.jsp?idMat=147723.
← 19. National Statistical Institute, Unemployed and unemployment rates – national level; statistical regions; districts, https://www.nsi.bg/en/content/6503/unemployed-and-unemployment-rates-national-level-statistical-regions-districts.
← 22. Council Regulation 139/2004 of 20 January 2004 on the on the control of concentrations between undertakings.
← 23. See “Bulgaria: New purchaser new rules. CPC clears the acquisition of Nova TV by Domuschievi brothers in “fast-track” proceeding”, Schonner, 22 May 2019, www.mondaq.com/broadcasting-film-tv-radio/805348/new-purchaser-new-rules-cpc-clears-the-acquisition-of-nova-tv-by-domuschievi-brothers-in-fast-track-proceeding. See also Plamen Yotov (Kambourov & Partners) and Aleksandra Kinaneva, “PPF Mergers in Bulgaria – a Tale of Double Standard”, Kluwer Competition Law Blog, September 2018, http://competitionlawblog.kluwercompetitionlaw.com/2018/09/20/ppf-mergers-bulgaria-tale-double-standard/