Bulgaria outruns Romania in EU race

Romania has made less progress than Bulgaria towards meeting the European Union accession criteria, given that Bulgaria has a functional market economy that can successfully cope with the competitive pressures in the EU. This is the conclusion of a survey conducted by the Macroeconomic Analysis and Studies Collective (CSAM) within the Public Finance Ministry, based on the European Commission’s country report.
CSAM is an institution recently set up and subordinated to the Finance Ministry, with its duties entailing an enhancement of the ministry’s capacity to analyse the economic policies.
According to the comparative report, the two countries meet the political criteria for the EU accession. On the other hand, Bulgaria meets almost all the economic criteria, whilst Romania, although having made progress in this regard, is still lagging behind in terms of reform application.
Subsequently, Bulgaria has a functional market economy, with the continuation of the reform programme allowing it to cope with the market forces in the EU in the medium run. Romania has indeed made progress in this respect, but has to go on with the structural reforms at a constant pace to be able to cope with the competition inside the EU, the report shows.
Romania’s economic growth in the last two years has been unable to make up for the losses incurred throughout 1997-1999, whilst the Bulgarian economy has progressed more than 4% annually in the past four years.
As regards the budget deficit, sustainability of this factor is no longer a reason for concern in Romania’s case, due to the increase in the foreign direct investment, up to 3.5% of GDP and to foreign transfers, which reached 2.6% of GDP last year, as well as to easier access to the international capital markets.
Bulgaria registers a high current account deficit, but foreign investment helped it overcome this problem. At the same time, the trade deficit was compensated by the service exports, mainly tourism.