Double taxation is one of the major problems facing Hungarian business in Bulgaria.
This was one of the messages Hungarian prime minister Ferenc Gyurcsany got from business officials at a forum held in Sofia on August 25.
The forum, organised by the Bulgarian-Hungarian Chamber of Commerce (BHCC), was held during Gyurcsanys one-day official visit to Bulgaria where he conferred with Prime Minister Sergei Stanishev, President Georgi Purvanov and Georgi Pirinski, the Speaker of Parliament.
At the forum, Gyurcsany encouraged his countrys business people to invest in Bulgaria because of the yields such investments would earn.
On more concrete issues, BHCC chairperson Jordan Jordanov told journalists that an agricultural attache would soon be appointed at the Hungarian embassy in Sofia because agriculture was one of the hot topics in relations between the two countries.
Jordanov described business relations between Bulgaria and Hungary as good but with a few problems that needed to be addressed in order to improve co-operation.
One such problem, according to Jordanov, was foreign trade deficit that Bulgaria had in exports to Hungary.
Low exports to Hungary is a problem which could be solved by encouraging Hungarian investment in Bulgaria, Jordanov said. It is very simple. Products produced in Bulgaria as a result of Hungarian investments would easily find their way as exports to Hungary, and that way the trade deficit would be overcome.
Another problem discussed at the forum was the need for further efforts to promote Hungarian business in Bulgaria.
Bulgaria can learn a lot from Hungarys experience in absorbing European Union (EU) pre-accession funds, especially because Hungary is one of the new EU member states that is succeeding in effectively absorbing a large percentage of the funds. The countrys experience in the area of antitrust law should be accepted as well, Jordanov said. Bulgaria was a priority for Hungary in the Balkans. Interest in Bulgarias financial markets, real-estate properties and tourism sector was proof of this.
Earlier the same day, after meeting Stanishev, Gyurcsany said he did not see any real hindrances to Bulgarias membership in the EU from January 1 2007. Bulgaria had achieved promising success in meeting commitments made to the EC. Gyurcsany hoped that this would be objectively presented in the Commissions report on Bulgarias EU-readiness in September.
As for Hungarys position on the countrys opening of its labour market to Bulgarians and Romanians after EU accession,. Gyurcsany said an open discussion was launched concerning the policy Hungary will choose to pursue in relation to Bulgaria and Romania. What is certain is that we have to apply equal rules for Romania as well as for Bulgaria. According to statistics on the international movement of the workforce, Bulgarians and Romanians are quite mobile, enterprising people who head for the world seeking better opportunities, better job, trying to acquire more knowledge.
Gyurcsany and Stanishev discussed topical issues in international relations, the focus falling on the European prospects of the Western Balkans and Kosovos future, as well as on co-operation between the two countries within NATO and the UN.
A Joint Declaration was signed expressing the two countries conviction that the fifth enlargement of the EU would be concluded on 1 January 2007 with the accession of Bulgaria and Romania.
Stanishev said that Bulgarians would not represent a threat to the Hungarian labour market. He cited economic growth in recent years in Bulgaria and the ever increasing deficit of qualified labour force and the rise in pay, especially in the private sector.
Hungary was the second country, following Slovakia, to ratify Bulgarias EU accession treaty.
Currently, Hungary ranks seventh among foreign investors in Bulgaria with a trade volume which last year stood at $306 million according to Bulgarian Government data.
The banking sector, real estate and retail make up the major Hungarian investments in Bulgaria. Bulgarian commercial bank MKB Unionbank is majority-owned by Hungarys MKB Bank.
On August 16, the National Savings and Commercial Bank of Hungary, (OTP), said it was interesting at buying Bulgarias DZI Bank, the 11th largest Bulgarian commercial bank in terms of assets. In May 2003 OTP acquired 100 per cent of Bulgarias DSK Bank for 311 million euro.
On August 9, CBA Bulgaria, part of Hungarian food retailer CBA Kereskedelmi, said it would invest two million leva in the construction of new outlets and a logistics centre in the city of Rousse on the Danube. CBA Property Investment, part of CBA Bulgaria, would also invest five million leva in the construction of an industrial park in the central Bulgarian city of Veliko Turnovo, which will include CBA outlet, Praktiker outlet and others. CBA Bulgaria runs 170 outlets in 26 Bulgarian towns. The company planned to invest more 50 million leva in Bulgarian projects in the next few years, according to Dnevnik daily.
Another major Hungarian business player is the Hungarian investment group TriGranit. Last month the investment group said it had earmarked 200 million euro for property development projects in Sofia and Black Sea resorts. TriGranit is to invest in shopping and amusement centres, following their experience in other countries in the region.
