site.btaGerman-Bulgarian Chamber of Commerce and Industry Reports EUR 338 Million Decline in German Investments in Bulgaria in 2014

German-Bulgarian Chamber of Commerce and Industry  Reports EUR 338 Million Decline in German Investments in  Bulgaria in 2014

Sofia, February 17 (BTA) - The decline of German investments in
Bulgaria in January-December 2014 was 338 million euro,
according to official data of the Bulgarian central bank, head
of the German-Bulgarian Chamber of Commerce and Industry Mitko
Vassilev said Tuesday, speaking to reporters.

Vassilev said the decline was not due to German companies
leaving the Bulgarian market, but rather, to the transfer of
financial resources whereby the loans taken out by the parent
companies are now repaid. He said that since major German
investors such as E.ON, WAZ and Kloesters left Bulgaria, he did
not know other German companies following suit. Vassilev noted
that the central bank statistics does not cover follow-up
investments, which a number of German companies make in
Bulgaria, but only new investments.

At the same time, the commercial exchange between Bulgaria and
Germany in 2014 will reach record-high levels, Vassilev said. In
 January-November alone the exchange was 5,395.65 million euro,
whereas it stood at 5,325.75 million euro for the entire 2013.
However, 2013 was the first year since 1942 when Bulgaria had a
trade surplus with Germany while for 2014 Bulgaria will again
report a deficit.

German companies cite the ineffective administration,
corruption, organized crime, the lack of reforms in education as
 the main problems they face in Bulgaria, while the tax system,
the low labour costs, and the geographic location of this
country are noted as advantages, Vassilev said.

The German-Bulgarian Chamber of Commerce and Industry and the
French-Bulgarian Chamber of Commerce and Industry held Tuesday a
 meeting with Economy Minister Bozhidar Loukarski. The meeting
was also attended by the two countries' ambassadors in Sofia.

Speaking to reporters, Loukarski said that the settlement of the
 Kloesters-Cemeco case in December 2014 will boost the interest
in Bulgaria on the part of German companies.

In 2005 Kloesters Beteiligungsgesellschaft mbH of Kempen,
Germany, participated in a Bulgarian project company Cemeco
which planned to build a cement-making plant. However, as a
decision on the environmental impact assessment for the
undertaking failed to be obtained until 2008, the German company
 withdrew from the project. Germany recognized the presence of a
 state investment guarantee, compensated Kloesters and made
regress claims to Bulgaria to the amount of 4,186,704 euros on
account of a breach of the bilateral Treaty on Promotion of
Investments.

After talks, an agreement was reached between Bulgaria's
Ministry of Economy and Germany's Federal Ministry of Economics
and Energy, as well as between Bulgaria's Ministry of Economy
and Kloesters Beteiligungsgesellschaft mbH of Kempen, Germany,
on settlement by mutual consent of the Cemeco case. Under the
agreement between the two ministries, Bulgaria undertook to pay
Germany 2,093,352 euro - half of the amount of the regress
claims. The Bulgarian Parliament ratified the agreement on
December 18, 2014.