1. The EU Cohesion Policy: The Case of Bulgaria
Prof. Dimitar Hadjinikolov
University of National and World Economy,
Sofia, Bulgaria

2. Part II Briefly about Bulgaria as a member state
EU Cohesion policy in Bulgaria, priorities and institutional framework ( )
Achievements during MFF
Transport infrastructure projects
Environmental projects
Key problems

3. 1. Briefly about Bulgaria as a member state
Indicator
Unit
Year(s)
Bulgaria
EU avg.
Population
1000 inh.
2012
7306,8
504265,9
Population growth
pro mille
-8,0
3,7
Population aged 65+ %
18,8
17,8
GDP per head (PPS)
EU = 100
2015 46
100,0
Public debt
Government gross debt as a share of GDP
18,5
85,3
Employment in Agriculture
% of total employment
2011
20,0
5,2
R&D expenditure
% of GDP
0,6
2,0
Competitiveness Index
0 to 100
19,7
54,7
Population aged with high educational attainment
24,0
27,7
Density of motorways
Index of length, relative to area and population
2008
32,5
Density of railways
2010
98,3
Employment rate, ages 20-64
63,0
68,5
Unemployment rate
% of active population
12,3
10,5
At risk of poverty or exclusion
% of population
49,1
24,2
Male life expectancy at birth
Years
70,7
77,4
Female life expectancy at birth
77,8
83,2

4. Since 2007 Bulgaria’s economy has grown at a faster rate than the EU average. See the graph below. The average growth of Bulgarian economy in the years was 1.8% and of the EU economy only 0.7%.
However, it is insufficient as at this rate, about a century will be needed for Bulgaria to catch up with the EU average level GDP per capita.

5. Bulgarian organizations responsible for the programs
2. EU Cohesion policy in Bulgaria priorities and institutional framework
Programs title
Priorities
Bulgarian organizations responsible for the programs
EU funding ( , € Mil.)
Rural Development Program
Small enterprises and job creation support; Efficiency in energy and water use; Transport infrastructure; Reducing nitrous oxide and methane emissions; Organic farming
Ministry of Agriculture and Food
2339
Operational Program "Transport and Transport Infrastructure"
Transport infrastructure - motorways, railways, Sofia metro; intermodal transport
Ministry of Transport, Information Technology and Communications
1605
Operational Program "Environment"
Water supply and sanitation infrastructure; Municipal waste management; Biodiversity; Flood and landslides prevention; Air quality
Ministry of Environment and Water
1505
Operational Program "Regions in Growth"
Urban development (Sofia metro); Energy efficiency; Educational infrastructure; Road infrastructure; Tourism
Ministry of Regional Development and Public Works
1312

6. Bulgarian organisations responsible for the programmes
Program title
Priorities
Bulgarian organisations responsible for the programmes
EU funding ( , € Mil.)
Operational Program "Innovations and Competitiveness"
Techno,ogical development and innovations; SMEs; Energy and Resource Efficiency; interconnections with the neighbouring gas systems (Greece, Turkey, Serbia and Romania)
Ministry of Economy; Ministry of Energy
1181
Operational Program "Human Resources Development"
Reducing poverty; Promoting social inclusion (Roma integration);
Ministry of Labour and Social Policy
938
Operational Program "Science and Education for Smart Growth"
Research and innovation - Centers of Excellence and Centers of Competence; Reducing and preventing early school leaving (Roma integration); Improving access to higher education and lifelong learning for disadvantaged groups
Ministry of Science and Education
596
Operational Program "Good Governance"
Increasing institutional capacity and efficiency of public administrations and public services; Anti corruption measures; E-government
Ministry of Finance
286
Maritime and Fisheries Programme
Data collection, control, inspections; use of EU financial instruments
Ministry of Agriculture and Food 88
TOTAL
9850
Ministry of Agriculture and Food is managing 25% of the EU funding in Bulgaria!
Ministry of Regional Development and Public Works only 13%.
Question for reflection: Which Ministry is more important for the Cohesion policy?

7. 3. Achievements during MFF 2007-2013
What results have been achieved so far?
The total allocation from Cohesion Policy funding for the period in Bulgaria was € 6.9 billion.
As of about 85% of the allocated funding was used. It means that Bulgaria has used in about € 5.86 billion. In the same period Bulgarian GDP was € billion.
The EU Cohesion Policy funding in Bulgaria was equivalent only to about 1.64% of the country’s GDP.
Nonetheless, EU Cohesion Policy funding has been an important driver for reforms in Bulgaria, a role which will further increase in
EU Cohesion Policy funding has helped Bulgaria to develop the transport infrastructure and to improve the living conditions for a significant part of the population (especially in the capital Sofia).

8. EU Cohesion Policy funding has helped Bulgaria to:
serve over 280,000 more people by waste water projects;
implement many transport infrastructure projects, such as the extension of the Sofia metro, Trakiya Motorway, the Sofia Airport;
improve urban transport for some 1,289,744 citizens, mainly in the 6 biggest cities of Bulgaria, namely Sofia, Plovdiv, Varna, Burgas, Pleven, Stara Zagora;
improve educational infrastructure for over 30,000 students and pupils;
provide scholarships to some 172,000 students;
provide social services in a family environment for more than 51,000 persons;
modernize 20 cultural facilities;
invest in energy saving measures in public buildings and schools, etc.

10. 4. Transport infrastructure projects
Total length of motorways in 2007 – 418 km; in 2016 – 707 km
The only fully completed motorway in Bulgaria is Sofia-Burgas motorway.
It is part of EU Orient-East Med Core Network Corridor.
Another part of the corridor is Sofia-Thessaloniki motorway, which is under construction.
In Bulgaria, construction of motorways started in the 1970’s. However, construction speed was very slow – about км annually. Only since 2007 there has been accelerated construction.

11. The picture shows the bridge called “New Europe” over the Danube river in the Bulgarian town of Vidin.
It is 1971 m long, includes two lanes in each direction, electrified railway track and a bicycle lane.
This long northwest-south eastern corridor will connect central Europe with the maritime interfaces of the North, Baltic, Black and the Mediterranean Sea, making it possible to optimize the use of the ports concerned and the motorways to the seas.
The corridor starts in Greece (Athina – Patra/Igoumenitsa) and reaches to Berlin and Hamburg in Germany.
There are plans to develop Bulgaria’s railway system, to guarantee higher speed of trains, in compliance with EU standards. There are allocated investments for development of the Black Sea ports and those at the Danube river.

12. 5. Еnvironmental projects
Project “Electrification and reconstruction of Svilengrad-Turkish Border railway line” to reach a speed of 160 km/h.
5. Еnvironmental projects
Although there is a separate operational program “Environment”, the implementation of environmental projects can be found in all operational programs.
In the period , through this operational program about €1.2 billion or € 170 million annually were utilized from the EU budget. Most of these funds were used for funding local projects, run by municipalities, predominantly in the capital municipality and some other big municipalities.
The first railway line in Bulgaria was opened in 1866 and has a length of 223 km.
Railway electrification began in 1963 and since then there have been double track railways.
The state company BDZ operates the railway transport.

13. % of eligible project costs
Project №DIR “Integrated System of Municipal Waste Treatment Facilities for Sofia Municipality “
isposed in landfills
Funding sources
Value in € Mil.
 % of eligible project costs
EU funding
150 85
Own contribution from Sofia Municipality, incl. EIB loan 27 15
Total cost of the project with VAT:
177
100
Waste management is a serious problem in Bulgaria as well as in other southern EU members states.
Sofia and other big cities have accumulated huge amounts of household waste kept in temporary landfills.
Recycling is one of the solutions. Another one is to process the waste into useful biomass. Part of the waste is burnt into modern waste treatment facilities like the new one.

14. Priority axis 1: Water
Project: Improving and developing the infrastructure for drinking water and waste water in the municipality of Veliko Turnovo
The project provides construction of new sewerage network (including collectors) and water pipeline network (€ m).
Amount of the project € 22 Mil. (85% from the EU).
Similar projects were implemented also in a number of other Bulgarian municipalities: Burgas, Vratsa, Gabrovo, Dimitrovgrad, etc.

15. 6. Key problems
Duplication of responsibilities and activities. This leads to waste of resources and overexpansion of administrative staff.
Example: Road infrastructure development is a task of three different Operational programs: "Transport and Transport Infrastructure“; "Regions in Growth“; “Rural development”. Тhis creates prerequisites for duplication of projects.
It is difficult to implement complex regional projects for infrastructure development because in Bulgaria there are no real regions. After joining the EU , 6 purely formal Planning Regions were created (according to NACE 2 - Nomenclature of Territorial Units for Statistics).
In reality, the infrastructure is managed centrally by the government or the municipalities which are quite different.
The largest and strongest is the capital municipality – with a population of 1.5 million. The smallest municipality in Bulgaria has 625 people!
Guess where money would go?

16. Strong geographic concentration of resources – mainly in the capital Sofia and several big cities
The result is:

17. And it should be like this:

18. Lack of effective system of impact assessment
Lack of effective system of impact assessment. Financial parameters of projects are mainly monitored, while monitoring of economic, social and environmental impact is formal.
Example:
Under Operational program “Development of the Competitiveness of the Bulgarian Economy” a total of € 15 million were spent to create clusters of SMEs in Bulgaria in the period About 250 new clusters were created. However, according to the Association of Business Clusters most of them are incidental communities, created for the sole purpose to utilize EU funds. No impact analysis has been made, but again in another €10 million have been allocated for “clusters”.
Poor sustainability of projects, financed with EU funds
Example: A key activity, funded by the EU is road construction. These projects, however, do not allocate funds for maintenance of roads already built. This is one of the reasons for the poor state of Bulgaria’s road infrastructure, in spite of the fact that more and more new roads are built.

19. Subsidizing can become a good environment for corruption, especially if there is no transparency in tender procedures.
Bulgaria consistently ranks among the EU Member States with the highest perceived level of corruption, and corruption is considered to be one of the most important barriers to doing business in Bulgaria.
As part of its anti-corruption strategy, the Bulgarian government has launched a number of initiatives targeting corruption more generally throughout the public administration. These include a reform of the administrative inspectorates, measures to improve the public procurement system, and the preparation of sectorial anti-corruption plans containing preventive measures in a number of specific sectors considered to be at high-risk of 'low-level' corruption.