Category: Business Support

The Director of the Bulgarian Institute for Analysis and Assessment of Tourism gave an interview for FOCUS News Agency in the beginning of May. According to Mr. Rumen Draganov, Bulgaria should observe and obey the tourism legislation valid for the Schengen zone. Az Mr. Draganov said, Bulgaria is a European Union member and all travelers who have Schengen visas can come in the country even if they do not have a return ticket. As the Director of the Bulgarian Institute for Analysis and Assessment of Tourism said, it is not possible for other legislation to be active on the Bulgarian territory and it is not possible for a tour operator to have activities in Bulgaria if that tour operator is not registered under the Bulgarian legislation.

Mr. Rumen Draganov confirmed that the country should obey and observe the legislation of Schengen, as well as all EU directives, as well as the Tourism Act from 2002 that has been recently replaced by the Tourism Act from 2013. The other directives that have to be observed as well are the Consumer Protection Act and Directive 90314. This behavior of the authorities will confirm the good reputation that Bulgaria has among the travelers and the institutions in the European Union and in the Schengen zone.

An improved business situation will be among one of the benefits for Bulgaria is the country enters the Schengen agreement zone in the beginning or spring of next year. The abolition of the internal borders and the unified requirements as far as the goods are concerned will remove the barriers in front of Bulgaria and will alleviate the trade within the European Union. The implementation of the European standards that are applied at the outer borders will help the trade processes with third parties as well, as there will be control at one stop only and the faster transportation will be guaranteed. Besides that the border stops will be improved, as well as the quality of the services.

The local business in Bulgaria will enjoy a positive effect as well, since the companies will be able to offer their goods and services to the neighboring countries and the rest of the members of the Schengen zone. The customers will gain an access to alternative markets, will be able to use the nearby airports and will enjoy lower prices due to the competition. The entry of Bulgaria into the European border-free zone will have a positive effect on the trips from and to Bulgaria. People will feel free to travel around, without worrying for passport checks or waiting at the borders for hours.

When Bulgaria finally enters the Schengen zone, which will hopefully become a reality in the future, this will have its impact on the local business. What will the companies obtain from the membership in the free-travel Schengen area? From a practical point of view, the lack of borders will make easier the transport of goods and will alleviate the travel. The Bulgarian tour operators and travel companies will be in the position to offer various combined trips. With Bulgaria being member of the Schengen agreement zone, travelers from other countries will be more eager to visit the resorts of Bulgaria. This is especially valid for travelers from Asia.

The country could also benefit from being a transit state and the predictions are that there will be two min travel destination lines from Greece and Turkey to the countries in Western Europe and from the countries in Schengen zone that are traveling to the resorts of Greece, Turkey and hopefully, the cheaper Bulgarian resorts. In general, the membership in the passport-free Schengen zone will create additional conditions for the development of a common economic zone in the area. This includes integration of the value added taxes, which will further lead to more serious interdependence of the businesses in the area. Moreover, the companies will have the freedom to choose where to situated their service centers and their activities. These will be areas with reasonable office rental prices and highly-trained professionals.

The activities in Bulgaria that are related with the implementation of all criteria that are requested by the Schengen authorities are being financed by the so called Instrument Schengen. The investments made are associated with the technical equipment (motor vehicles, equipment for monitoring and control of borders, special equipment for monitoring and control, special equipment for conducting police operations near border areas, etc.), as well as the construction and maintenance of the Schengen Information System and the Visa Information System, investments related to optimization and upgrading of facilities in the border zone for better border security, trainings for improvement of the staff qualifications, etc.

The access of Bulgaria into the Schengen zone will be very positive from political and economic point of view. When Bulgaria finally becomes a regular member state, which is believed to happen in the beginning of next year, the country will benefit from the collaboration between the judicial and police authorities against the international criminality. Besides that, the Schengen membership will attract many new investors in the country, which will bring profits to the business and a better perspective in front of the country. As a member state of the Schengen agreement, Bulgaria will become more appealing to the foreign investors.

The access of Bulgaria and Romania into the passport-free traveling throughout Europe has been postponed for yet another time and this is for an indefinite period. The situation led to serious debates among the politicians in Bulgaria, who were blaming one political formation or another. At the same time Romanians seemed to be bored with the numerous delays and no longer interested whether they will enter the Schengen zone or not.

Here comes the question what does the Schengen zone symbolize? The main idea behind the Schengen agreement is for the possibility of free crossing of borders between the countries that are members of the Schengen zone. At the same time, this agreement aims to guarantee the level of security of all the member states, which is achieved by various means, including common standards of border control at the external borders; similar visa policy; similar national legislation, cross-border police and judicial cooperation, as well as introduction of the Schengen Information System. Today, all 25 member states of the Schengen agreement apply these rules. Twenty-two of the countries are members of the European Union as well. The other three that participate in the Schengen zone are Switzerland, Island and Norway. Hopefully, Bulgaria and Romania will enter the Schengen zone at the beginning of next year as 26th and 27th state of Schengen.

In the beginning of April, the Bulgarian President Mr. Plevneliev was in Budapest to meet the Hungarian President. There he expressed his gratitude for the support that Hungary provided to the accession of Bulgaria in the Schengen zone. The Bulgarian President confirmed that the country is ready for Schengen and has already met the technical requirements imposed for the membership and the planned accession in two stages. Both presidents confirmed that they support the planned enlargement of the European Union. Mr. Plevneliev also stated that when there is a problem, it is being solved. He was positive that if the country has problems with Roma invasion in the UK, it will solve the issue. For now however, there is no evidence for such problems.

According to the Bulgarian President, Bulgaria has invested a lot in keeping the borders save and strong and that the authorities have acted in the most responsible manner. He also confirmed that Bulgarians believe in the European responsibility and solidarity. The President shared the belief that Bulgaria will no longer be victim of internal problems in the European countries that organize campaigns against Sofia and Bulgaria.

At one point next spring Bulgaria will finally enter the Schengen zone and even if it allows for free travel with no passports, it sets a question about the privacy of the personal information. With the new European Information System that is being introduced, the security officials will be able to exchange information in a faster and easier way. This however evokes the privacy question. After all the min idea behind the Schengen Agreement was for a free movement without internal borders and controls. In other words, within the Schengen zone citizens can move freely without checking in with the authorities as they go from one country to the other.

With the new database, the information gathered and exchanged will include not only data for people who are missing or wanted, but also biometric data, photos and fingerprints that will be saved. It seems that after the expansion of the Schengen agreement, the European customs need to have a solid database system and work together on finding criminals, weapons and stolen cars. There are no border controls in the Schengen zone, but still the member states should joint their forces in order to fight crime. No doubt, there should be standards imposed on what data should be saved and for what purposes, as well as who will have the right to access it. Since Bulgaria will soon be part of that, people have to know that there will be personal information that they will have to share.

In the last two months have been heard various arguments for and against the entry on Bulgaria into the Schengen zone. But is this fear reasonable? No doubts the debate whether Bulgaria and Romania should enter the passport-free zone will get hotter in the next months that follow. It is expected that the two countries will become members of the agreement early next year. This led to fears in Britain over the immigration wave that is expected to reach the country.

Bulgarians however find this fear as offensive. The truth is that there are many gypsies who would seek for a way to enter UK, so if the British authorities are afraid of that they can introduce a simple English language test and find out who has a real reason to move to UK and has made efforts and who has not. As for the immigrants, there are many Bulgarians who are working in the United Kingdom for years, paying their taxes. The people that are now living in Bulgaria are people who want to change their country to the better and they want one thing as far as Schengen is concerned – freedom to travel when they want to and no bureaucracy. They are fed up of being treated as untrustworthy, second hand people. Hopefully, soon this will stop.

One month has passed since the bank crises in Cyprus and the country is still in a stage of uncertainly. A month ago on a meeting of the Ministers of Finance in the European Zone was taken a decision that the deposits in Cyprus have to be taken a tax on and thus one of the two sectors of the local economy that were productive were destroyed. After every political decision taken on the finances, the people are the one to suffer and in this case these are the people of Cyprus. Many businesses have closed down, a lot of people are unemployed and there is no official information about the direction in which the country will go.

People are afraid of the future and try to save as much as possible, so that they can survive through the crises. They are not buying anything more than the minimum everyday necessities and of course, this immediately affects the economy. Locals have a lot of mortgages and are not certain whether they will be able to make the payments. Many people do not know what to expect from their retirement funds and are not certain if they will have peaceful living when retired or not. In general, there is a feeling of despair and uncertainty in Cyprus now which will not go away soon.

This Sunday the Bank of Cyprus, which is the lender of the country, implemented a conversion of the unused cash deposits available in the bank into equity. This was one of the conditions asked for by the international lenders, in order to provide the financial aid to the island. According to Reuters, the process that is known as bail-in makes those people who have deposits be the one that will pay for the recapitalization of the bank. Bank of Cyprus was seriously hit by massive losses, being the largest bank in the country. It was announced that the bank has converted 37.5 percent of the deposits that are exceeding 100 000 Euros in high shares, while additional 22.5 percent of the deposits are still held and might be converted into shares in the future. Other 30 percent of the deposits beyond 100 000 Euros will be frozen and used later if needed. No information was given on the actual cash these percentages stay for. Most probably this information will be given in the mid of the summer.

The process known as bail-in also includes dissolution of the Popular Bank, which is the second largest lender in Cyprus. This is another effort that the country makes in order to collect the 13 billion euros that it needs and to recover its economy. The country is expected to get another ten billion by the International Monetary Fund and the European Union. The parliament of Cyprus will vote on the bailout tomorrow, on 30th April, while the first part of the help from the European Union and from the International Monetary Fund will be received in May.