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Center for Economic Development
The Bulgarian Economy – July 2006
In the beginning of 2006 the ESTAT index registered expectations of slight improvement in the economic conjuncture. The official data for the first quarter confirmed these expectations. In the first three months of 2006 the Bulgarian economy registered real growth of 5.6 per cent. The dynamics of the short-term indicators gives us grounds to project that 2006 annual economic growth will be higher than the projected value of 5.3 per cent. Services are again the main driver of growth, while industry and construction register a slowdown. No change is observed in the development of agriculture and stagnation in this sector continues.
Unemployment registers a stable downward trend, investments in equity are up for a third quarter in a row, growth in final consumption is more moderate. These indicators give grounds for optimism. On the other hand, the current account deficit on the balance of payments is steadily up, accounting for 7.3 pr cent of GDP in the period January – May 2006 or up 73 per cent on the deficit for the same period of last year. Foreign direct investments cover only half of the trade deficit. Exports, however, show a trend of higher increase against imports, which is expected to persist. If foreign investments preserve their sustained growth, as anticipated, the negative economic effects of the increasing current account deficit on the balance of payments would not be registered.
From the beginning of 2006 till June consumer prices are up 2.9 per cent and are not expected to increase their levels in the summer months owing to a seasonal decline in food prices which account for a significant relative share of the consumer basket.
Overall, the financial sector registers growth and remains relatively stable. At the same time, some negative trends are observed. The first concerns the growing credit expansion of commercial banks which has a negative effect on economic stability and is also a factor for the current account deficit. On the other hand, credit expansion contributes to a jump in the short-term foreign indebtedness of banks and respectively of the whole economy. The capital market registered record-breaking turnover values and sustainable growth in indexes. It is however still dominated by incidental block transactions, and not by sustainable trade on the regulated market.
Development of public finance is characterized by persistence of major trends established in previous periods. Among these are: the increase in the actual quota of reallocation through the budget and the strengthened role of the state in the Bulgarian economy. Draft changes of tax legislation contain some good elements but fail again to be structured into an economically sound system.
As regards the individual sectors, development of construction and real estate services has been most dynamic. Transport, energy sector and agriculture register stagnation or decline.
The public administration and the business are mounting efforts in the preparation for EU membership, in particular in the implementation of environmental standards and the absorption of structural funds.
The high real GDP growth in the first quarter of the year (5.6 per cent on a year-over-year basis) is indicative of higher economic dynamics over the year. Improvement of the short-term business climate and consumer confidence indicators in the first half of 2006 and of the monthly indexes in industry and trade gives us grounds to expect higher growth in the second quarter and over the year.
Improved consumer confidence in April is totally attributable to the higher confidence of the rural population, indicating a better year for agriculture. On the other hand, the reestablished pessimistic attitudes of the urban population are unfavorable. The upward trend of the general business climate indicator observed since the beginning of 2006 accelerated in April and since May this indicator has already been above the levels for the same period of last year.
We expect that in the second quarter services will be again a leading contributor to GDP growth because the business climate in this sector registers most favorable developments. Contrary to services, the business climate index in industry and construction is down below the levels for the second quarter of last year. Furthermore, index slowdown in industrial production and sales in April and May gives us grounds to project lower value added growth in industry against last year.
Despite the slowdown in the first three months of 2006, value added in industry registered highest growth in the first quarter – 8.8 per cent (against 11 per cent for the same period of last year). Services were most contributive of GDP growth (3.1 percentage points), with value added up 6 per cent. The slowdown of growth in the private sector (down from 10.8 per cent for the first quarter of last year to 8.7 per cent in 2006) is attributable again to a slowdown in agriculture (2.7 per cent).
On the demand side, in the first quarter of 2006 GDP growth (5.6 per cent) is attributable to the contribution by 4.5 percentage points of investments in equity, 4 percentage points growth in stocks; the contribution of exports of goods and services stands at 7.6 percentage points and the negative contribution of imports has reached 14.9 percentage points.
Against the structure of growth in the past year, the contribution of final consumption is down whereas the contribution of the other components of GDP consumption is up. The highly deteriorated net contribution of exports (from negative value of 5.8 percentage points to negative value of 7.3 percentage points) is probably attributable to the unusually high contribution of the dynamics in stocks.
For a third quarter in a row, growth of investments in equity is above 20 per cent on a year-over-year basis. It can be expected that the dynamics in the sectoral structure of investments, which is in favor of the processing industry, will result in improved competitiveness of the economy. More than one fourth of the costs for acquisition of fixed assets are incurred in the processing industry, up 52.3 per cent against last year.
The dynamics of stocks registers almost triple growth, both in terms of value and share in GDP, and is attributable to a notable growth in the imports of energy resources whose nominal growth stands at 127 per cent against the first quarter of last year.
Growth in final consumption is more moderate (4.8 per cent now against 7 per cent in the first quarter of 2005) and is entirely attributable to growth in individual consumption (5.4 per cent against 7.1 per cent in the first quarter of 2005). Contrary to the beginning of last year, slower growth in consumption in 2006 is attributable to a less intensive growth in lending, as data show, and a decreased inflow of foreign current transfers.
In the fist quarter of 2006, the negative foreign trade balance of goods and services accounts for one fifth of GDP. Real growth in exports of goods and services accelerated to 12.9 per cent on a year-over-year basis (against 9.2 per cent in the same period of last year). However, growth in imports is two times higher, now standing at 20 per cent of GDP (against 10.8 per cent for the same period of last year).
In the first five months of 2006, the current account deficit is up 73 per cent on the same period of last year and all other current account elements continue to deteriorate. The deteriorated current account deficit (up EUR 735 m against the first five months of 2005) is attributable to a deterioration of the trade deficit (up EUR 394 m) and of the balance in: services (up EUR 212 m), income (up EUR 79 m) and transfers (up EUR51 m).
The ratio of the negative trade balance to GDP is up from 6.6 to 7.6 per cent and is mainly accounted for by a growth of 64 per cent in the balance of oil, natural gas and oil products. This is attributable to deteriorated negative balances on Other Services and transport services and decreased positive balance in travels. Income from travels of foreigners to Bulgaria decreases (though by negligible 0.2 per cent), whereas in the first five months of 2006 Bulgarians’ spending on travels abroad is up 12 per cent against the same period of last year. The positive balance under the "Income" is decreasing which is mostly attributable to a decreasing income from portfolio investments abroad and the growth in payments on direct investments in Bulgaria. Net inflow of current transfers is decreasing. While proceeds still stand at four times the amount of current transfer payments, they decrease faster than payments.
Accelerated growth, decreasing unemployment and increasing consumption of Bulgaria’s major trade partners – the EU Member States – promote foreign trade development. In terms of value, in the first five months of 2006 total foreign trade increased by almost 30 per cent over the same period of 2005. The degree of integration of the Bulgarian economy into global economy is improving, with the ratio of trade to GDP standing now at above 130 per cent. The long awaited reversal of the growth trend in exports and imports is already a fact – in the first five months of 2006 nominal growth in exports (30.2 per cent) is higher than nominal growth in imports (29.5 per cent). Despite that, the value of imported goods is 48 per cent higher compared to the value of exported goods, accounting for a deficit of EUR 2 226.1 b. In the period under review, attracted foreign direct investments (almost EUR 1 192 m) cover a little more than half of the foreign trade deficit. The factors contributing to growth in exports include: (1) sustainable economic growth of Bulgaria, which allows better planning and higher security of investments, and (2) renovated production capacities providing a basis for production of increasingly higher volume of goods for export. Oil prices and investments remain determinant of further growth in imports. One can hardly expect in the near future any changes in the structure of the primary energy resources used in Bulgaria, 60 per cent whereof are now imported. Delayed growth in private and collective consumption, which is attributable to restricted lending as well as to satisfied needs, shifts the weight of investments in the structure of imports.
Anticipations of sustainable inflow of foreign direct investments are based on a couple of factors. First is the upward trend of investments in the construction of new production capacities and in the expansion and reconstruction of existing capacities planned by some foreign investors. Second is the start of some of the largest investment projects in Bulgaria (e.g. Maritsa-Iztok 1). Third are the developments registered in privatization, e.g. the sale of District Heating Company Varna, the advertising for sale of Bulgaria Air and the district heating companies, as well as the progress achieved on the concessions for major highways. In order to realize the potential to attract more foreign investments, there is a need of concerted and well-directed efforts towards building the necessary infrastructure, training and educating the necessary labor force and maintaining a stable economic and financial environment.
In the span from early 2006 till June, consumer prices increased by 2.9 percent in total while foodstuff prices are down 1.27 per cent on December last year. Accumulated since year start fluctuation in administratively regulated prices stands at 12.98 per cent. After July we expect inflation to include the higher prices of heating and city transport in Sofia, as well as the eco-tax envisaged for electric appliances. More notable growth in total inflation against previous and future years is expected, attributable to the excise rates to be introduced for a number of products and the changed method of calculation of electricity and heating prices.
The market is not expected to exert notable pressure on consumer prices in the next months; prices in services may even decrease. Producer prices in industry will probably go up, to the extent that anticipations of managers in industry for slight rise of sale prices in the next three months persist. Only about one half of building contractors still expect higher sale prices in the sector for the next three months.
The high economic dynamics in the first quarter of 2006 is accompanied by accelerated growth in employment, decreasing unemployment and higher economic activity of the people. In contrast to the first quarter of last year, characterized by growth in employment of 1.9 per cent (on a year-over-the year basis) against higher total economic growth (5.9 per cent), the first half of 2006 registers accelerated growth in employment (3.6 per cent) against smaller growth in GDP (5.6 per cent). Growth in productivity (measured by value added per employed person) slowed down from 5.1 per cent to 2.7 per cent.
Sustainable decrease of unemployment continued in the first half of 2006. NSI’s labor force survey and Employment Agency (EA) data reflect identical positive trends. The unemployment coefficient calculated according to the labor force survey methodology is down to 9.7 per cent in the first quarter of 2006. According to data supplied by EA, the coefficient of registered unemployment is 9.2 per cent.
At the end of the fist quarter of 2006, the ESTAT index of business climate in Bulgaria reached a new peak value ever – 5.47. So far, a level above 5 points was registered just once – 5.27 in July 2004. After the low dynamics continuing for about a year, present growth reminds of the leap-frog increase registered in 2003 and 2004. For the fist time since 2002 the high index value has been attributable to the improved status of companies rather than to impulsive propensity to invest. All three components of the ESTAT Index register positive development. The April survey established record-breaking level of the components for the condition of companies and the business environment. Investment attitudes register growth as well, reaching peak values for the last year and a half. In our opinion the seasonal "bonus" typical for spring has some positive influence as well. On the other hand, it is not very likely to have any material effect, given its low levels over the whole 2005.
Enterprise policy. In the review period efforts to improve the business environment and harmonize the Bulgarian legislation with the acquis continued. A law amending and supplementing the SME Act was passed. New definitions of micro-, small and medium-sized enterprises were introduced in line with the respective European definitions. This is necessary in light of the support which these enterprises will receive from the EU structural funds, the European Investment Bank and the European Investment Fund. The aim is to achieve fair distribution of funds and comply with the principles and requirements of fair competition.
Amendments to the Public Procurement Act were passed as well. They take effect as of 1 July 2006. The aim is to harmonize Bulgarian legislation with EU public procurement rules and to create conditions for prompt and effective control of public procurement procedures. The secondary legislation to PPA also takes effect as of 1 July 2006.
A number of projects in support of the business are being implemented. Official launch was given to Project 100, Establishing Competitive Start-up Companies, which is aimed at supporting innovative business ideas. Some new initiatives to promote the innovative and technological development of enterprises were announced as well.
At the same time, in the period under review the efforts to improve the business environment remained ineffective. Business’ expectations of optimized regulatory regimes failed again. Work on the analysis of regimes administered at central and municipal level was postponed once more. A consulting company is to be assigned to make review of regimes and propose variants to facilitate them.
The business has problems with its preparation for the Single European Market and the improvement of company strategies. Bulgarian entrepreneurs are well behind in implementing the European quality management and control standards. This is a grand problem for agricultural producers in particular. There is a need to improve the awareness of companies about the EU trade policy which will significantly change the situation in Bulgaria after 1 January 2007. Trade with the EU Member States will not be classified as international trade and there will be no restrictions. However, EU’s Common Customs Tariff will be applied to imports from third countries. All that will increase internal market competition. Privatization processes continue at a slow pace. State monopolies are not restructured and generate losses. Concessions for transport infrastructure also fail to register notable progress.
Fiscal and tax policy. In mid 2006, development of public finance is characterized by persistence of major trends established in previous periods. Among these are: the increase in the actual quota of reallocation through the budget and the strengthened role of the state in the Bulgarian economy. The fiscal policy shall be definitely released from its quasi-monetary functions and temptations relating to the possible accumulation of budget surplus, by freeing the Bulgarian economy from taxes and social insurance contributions. Unfortunately, in the new draft law on value added tax, which is to take effect as of 1 January 2007, the Government applied again the "everybody gets something" principle, yielding to the pressure of the tourism lobby. Again the basic idea behind planned amendments to PITA and CITA is not clear. While the amendments contain some good elements, overall they can be characterized as piecemeal. Vignettes are expected to be eliminated. The long-awaited NRA information system will be implemented. The tax administration leadership is preparing to cope with the budgetary risks relating to Bulgaria’s accession to the EU.
Social and health policy. The business did not support Government’s income strategy till 2009. The inflationary rise of incomes and the underestimated productivity of labor factor, the faster increase of the minimum wage and the national level of collective labor bargaining, which will define the key basic wage parameters, represent potential risks for the economy.
Since early 2006 collection of social insurance contributions has been improving, yet there are no signs that it will result in further relief of the social security burden and create conditions for permanent stabilization of the labor market. Government efforts are focused on measures to increase social costs – rise of the minimum pension for length of service and age and indexation of pensions. Increasing healthcare costs also contribute to a higher fiscal burden on the economically active people and the business.
Environmental policy. The most important environmental policy developments in the second quarter, with direct effect on Bulgarian economic life, concern the implementation of legislation in the Waste Management sector. The Bulgarian business had hard times getting through the implementation problems of the Regulation on Packaging and Packaging Wastes – a process which continued for almost six months. In that period, important issues concerning the cooperation of the State, private entrepreneurs and consumers (the people) were raised. Among these are: the need of transparency and clear priorities for the management and spending of the funds paid by the business to the state-owned Enterprise for Management of Environmental Protection Activities (EMEPA) at MEW; fair competition of the companies operating on the environmental services market; seeking new forms of Government-business dialogue in implementing the environmental legislation; the issue of consumers’ role and interests, etc. The most important result of the business-Government dialogue on waste management is the set up of a new form of cooperation in the Bulgarian practice - the voluntary agreements mechanism and the Consultative Council on Packaging Waste. Successful packaging waste practices provide a good example of solving the implementing problems of waste management legislation, which can be transposed in other areas like the reuse, recovery and recycling of waste electrical and electronic equipment, batteries, etc.
Banking system.The banking system continues to dominate the financial sector. Domestic credit statistics show "end" of credit expansion. This is in fact an ostensible effect of BNB’s lop-sided statistics, resulting from the circumvention of regulations by commercial banks through transfer of credits to non-financial institutions and abroad.
Drastic deterioration of monetary aggregates continues and so does the indebtedness of households which raises concerns.
Most alarming is, however, the steep upward trend in Bulgaria’s foreign debts, which are reaching levels threatening Bulgaria’s capacity to serve its foreign debts and the Currency Board stability.
Insurance sector. In the past year income from premiums in the insurance sector was up 22.8 per cent. For the fist time levels stand at above BGN 1 b, with General Insurance accounting for 86 per cent and Life Insurance – for 14 per cent. The share of motor vehicle insurance is up, whereas property insurance continues a concern-raising downward trend. Income from Life Insurance is up by almost 50 per cent. Pension and annuity insurance is becoming increasingly popular. Mandatory motor vehicle insurance witnessed changes in the Insurance Code aimed at improving the financial stability of the Guarantee Fund and continuing the measures to improve the scope of the Third Party Liability Insurance. European Commission’s assessment of Bulgaria’s achievements in the mandatory insurance sector is rather positive. The Financial Supervision Commission (FSC) announced that the scope of the Third Party Liability Insurance is above 97 per cent, which means that Bulgaria will be able to sign the Green Card agreement without delay.
Capital market. Despite the record breaking turnover values ever in the history of the Bulgarian capital market and a rather stable growth in indexes in the second quarter, incidental block transactions still dominate, leading to less representative indicators. Market participants increasingly share the opinion that there is a need to take prompt and efficient measures to attract promising and public companies which should fill in the gap between the demand of financial instruments and their supply by existing companies. Encouraging is the fact that some public companies increasingly focus on good corporate governance practices, which can improve their investment attractiveness.
Basic Economic Sectors
Energy sector.Bulgaria is still the main net exporter of electricity in Southeast Europe. The National Electricity Company (NEC) reports 11.7 per cent growth in electricity exports for the first five months of 2006. Strong energy exports continue to promote production in the sector which registers growth of 5.4 percent. The higher international prices of energy resources decreased domestic consumption and thus improved the energy intensity of the economy. Despite the positive trend registered by this indicator, Bulgaria remains far below average EU levels. The appointment of a contractor for the construction of Belene NPP entered its final phase. NEC took up project management. Construction of the first energy block can be financed entirely with company own funds and government-guaranteed loans from international credit institutions. There is still lack of a clear position of the Ministry of Economy and Energy as to the phase in which a private investor will be included in the project. Proposed amendments to the Energy Act were introduced in the National Assembly at the end of May. The new texts will allow NEC to sell electricity directly to the biggest industrial consumers connected to the grid. Thus NEC could deprive the electricity distribution companies of their most-profitable market quota. In the natural gas sub-sector, the Government announced work in progress on four possible variants of changes to the conditions of contracts with Gasprom. Meanwhile, international exchanges saw higher oil prices, driven up by the political developments in the Middle East. The domestic market did not witness changes of regulated electricity and gas prices for the third quarter of 2006.
Transport. Only six months before 1 January 2007, the lack of correspondence between the quality of Bulgaria’s road infrastructure and that of the European Union is quite evident. The measures taken by the government administration usually remain at the level of concepts and listing of necessary actions. There is lack of integration of priorities, real needs and capacities. Similar are the defects of the ten-year National Strategy for the Integrated Development of Bulgaria’s Infrastructure, presented by the Ministry of Transport. Despite the criticism leveled at the strategy, it is an important step towards improvement of the basic infrastructure because Bulgaria is in urgent need of a long-term strategic document setting the framework for absorption of monies from EU’s Cohesion Fund and structural funds. In that line was also the restructuring of the Road Executive Agency. It will be transformed into a special Republican Road Infrastructure fund under the control of three ministers – of finance, transport, and regional development and public works. In the past quarter, the Supreme Administrative Court (SAC) rejected the appeal against the concession of Trakia Highway. The concession plans for sea and river ports proposed by the previous government are still waiting to be developed into a programming document. No developments are witnessed either on railway sector problems – the two state companies continue to generate losses. The familiar sale of assets and state subsidy variants are still the only proposals. The state air carrier Bulgaria Air is under privatization. The insufficient number of aircrafts and company’s deteriorated image make it increasingly less competitive. Bulgaria signed the European Common Aviation Area Agreement, also known as the Open Sky Agreement. Real market opening is expected to begin at the end of 2006.
Construction and real property. Latest foreign investment data show that investments in construction grew three times in the first three months of 2006. Investors’ interest towards Bulgaria is attributable to country's future EU membership and the underdeveloped as yet land and industrial construction markets which promise high yield. A key factor for growth in the sector is the development of the special purpose investment companies which are a new phenomenon in the Bulgarian market. The preferences laid down in the Investment Promotion Act provide additional incentives for the start up of large projects. In the first quarter of 2006 prices of residential properties are up 4.7 per cent. Appreciation is higher compared to the last six months, while of the big towns only Russe and Stara Zagora register notable rise in prices. Burgas Region does not witness slowdown of construction, despite that property prices remain relatively stable. A record breaking number of building permits were issued in the region in the first quarter of 2006.
High technology and communications. In the second quarter of 2006 the ICT sector witnessed interesting developments which are expected to change for the positive its course. After more than a year of discussions and preparations, the final text of the Electronic Trade Act was passed at last at the end of June and is to take effect as of 24 December 2006. The biggest Internet deal of the year, namely the purchase of 50 per cent of the telecommunications operator and Internet service provider Spectrum Net by Alfa Finance Holding, was also announced at that time.
Tourism. Bulgarian tourism continues at a relatively high pace. At the same time, the downward trend in the number of tourists from major tourist markets of key importance for Bulgaria like Germany and Great Britain persists. It is confirmed also by early summer information from the biggest German tourist operators which report notable decrease in the number of tourists up to 15 per cent against last year. The number of tourists from Great Britain is also down.
The long-term forecast of tourism development internationally, developed by WTO, does not bode brilliant future for Bulgarian tourism, either, which is bound to remain oriented towards European tourists with low purchasing power. The number of tourists is expected to double by 2016, but unfortunately revenues from tourism will not register notable growth.
Some good practices of diversifying the tourism product and developing new forms of tourism were registered in the past period, like dental, wine tourism, creating special centers for sea water and seaweeds therapy, etc. These forms of tourism are a good alternative to the mass and cheap summer and winter tourism in Bulgaria. Two developments in the legal and institutional environment which are of key importance for tourism need to be mentioned. In the fist place, the discussion on first reading of the draft law on the Black SeaCoast. Second, the attempts to unite Bulgarian tourism and create a nationally representative branch organization. Unfortunately neither event has yielded yet any clear and well-defined results.
Agriculture. European Commission’s monitoring report of May 2006 contains serious focus on the problems of agriculture. Two of the "six areas of serious concern" highlighted in the report relate to commitments under Chapter Agriculture, namely: creating an adequate Integrated Administration and Control System (IACS) in agriculture and building facilities for the collection, processing and destruction of animal rendering products (rendering facilities). Specific measures to overcome the gap in these two areas are laid down in the Government action plan. There is still much to be done on the other tasks: set up of the Paying Agency and the veterinary border inspection posts, creating a register of vineyards, building and accrediting the laboratories for the analysis of fat content at all individual dairy factories, adoption of the National Strategic Plan and Program for Development of the Rural Regions, 2007-2013 which shall be the basis for absorption of the structural funds. Bulgaria relies on EUR 2.3 b from EU for the seven year period and annual financing will be 5-6 times that currently received under SAPARD.
EU Structural Funds and Regional Policy
Important decisions on the priorities of EU structural funds allocation in the period 2007 – 2013 were taken in July 2006. The European Parliament approved structural funds legislation and defined the objectives, the financial resources available and the criteria for their allocation. Around €308 billion - or 35.7 per cent of the total EU budget - will now be available to spend, as scheduled, from 1 January 2007. The new focal points in the use of monies from the European Regional Development Funds, the European Social Fund and the Cohesion Fund require greater focus on environment protection, environmental balance and sustainable development; special care for people with disabilities; enhancing the partnership principles.
According to the procedures for allocation of monies from the structural funds, the Commission will draw up, in late July, Community Strategic Guidelines on which the European Parliament will vote in September. These are the starting point for the national reference frameworks and operational plans to be negotiated between the Commission and individual MemberStates in the autumn.
Bulgaria continues its intensive preparation for full EU membership by developing the strategic and programming framework for the absorption of the European funds. The first draft of a National Strategic Reference Framework was sent to the European Commission for approval in April. Work on the operational programs to the reference framework is nearing completion. Programs are currently being popularized among the Bulgarian business and NGOs.
The future changes of planning region borders will be important for regional policy implementation. They are called for by the fact that two of the planning regions – the Northwest and the Southeast – do not satisfy the European region standards in terms of number of the population. Consequently, respective changes in the scope of the regions covered by each one of the planning regions will be made as well. Discussions and decision-making are pending.
Legislative Amendments Relative to the Economy
The second quarter of 2006 was marked by intensive legislative activity of the National Assembly. Compliance with EU directives was again the basic motive behind the approval of amendments and supplements to the existing legislation, in disregard of the fact that there is lack of sufficient time and will to take account of the specific situation in Bulgaria and of the expected impact and effect of the new legislation on the people and the business. Such an approach of the legislator arouses suspicions of "an end in itself" nature and lack of thoroughness of the lawmaking process.
The judicial reform was among the most important areas of legislative regulation, in particular establishing the principle of universal competition for magistrates and the principle of random distribution of cases, introducing information technologies in the judicial system.
Amendments to the Commercial Code covered two legal institutes – commercial bankruptcy and commercial representation.
Significant amendments were also made to the Public Procurement Act. They are basically aimed at harmonizing Bulgarian legislation with two new EU directives in the field and at speeding up integration with the EU Member States. These amendments changed completely the appealing procedures for contracting authority acts and introduced two new procedures: e-tender and competitive dialogue.
The passed new Concessions Act changes completely the conceptual essence of concessions. The main objective of the new law is to introduce an integrated register for concessions granted by the State and by municipalities, and to harmonize concession and public procurement regimes.
A Business Register Act re-regulating the business registration procedure form judicial into administrative was passed in light of the registry reform going on in Bulgaria. This approach draws upon the best European practices and aims to relieve the judicial system of the burden of extrinsic activities and to provide prompt services of high quality to the business. Remote access to the register via the Internet has been extensively regulated.
The main objective of the newly passed Administrative Procedure Code is to provide facilitated, faster, more easily accessible and understandable administrative procedure for the people. APC provides for set up of regional administrative courts which will improve the access of people to justice.
The abundance of amendments and supplements to the Labor Code are aimed at regulating more rights for workers and employees in line with EU requirements. The terms and procedure of election and operation of trade unions of workers and employees are regulated in detail and mandatory procedures for informing and consulting workers and employees on various labor relation aspects are laid down.
The need to guarantee turnover security and protect the interests of all e-trade actors called for developing the necessary legislation which would properly regulate the relationships in the modern information society. In that light, an Electronic Trade Act was passed and promulgated.