"When I first came here about six months ago, one of my first questions to my colleagues was how many Swedes there were in Bulgaria and they said, 50," recalls ambassador Paul Beijer.

"I was, of course, deeply disappointed – but then I discovered that there was a fairly considerable business presence here, only that most of the enterprises had passed the stage of having a Swedish manager and are run by Bulgarians or third country people."

This is a healthy development, he says.

"To put it succinctly, Swedish investments are not at all on the scale of Austria or Italy or Greece in this country. but we are fairly well represented in terms of the number of Swedish companies that have some form of operation."

Swedish companies involved in Bulgaria are present in forms from representative offices to sales offices and in some cases, manufacturing.

One example is mobile phone giant Ericsson, which has a regional logistics centre in Bulgaria for the Central European region.

One of the few well-known Swedish companies not yet present in Bulgaria is IKEA, and that is on its way too.

Beijer says that in terms of decisions about investments here in Bulgaria, there is naturally the factor of the ups and downs of the international economic situation, but also the fact that this country faces "fairly tough" competition from others.

"And one drawback that Bulgaria still has is a weak judicial system. There are a number of cases of Swedish companies that have got caught in difficult legal actions that drag on for years and years, and of course, this is something that is taken into account when companies decide whether to expand or whether to put something new. It’s not the only factor that affects a decision; of course there are lots of different factors, but it does affect how a prospect is viewed."

Beijer says that it must be added that Swedish firms have both kinds of experience in this respect, good and bad.

"Some firms have had bad luck, in getting caught up in this kind of thing, perhaps bad luck in their choice of partners, others have managed quite without any hitch at all."

As to possible further investments, Beijer says that it is true that there is an ongoing process of some firms that assess possibilities "almost on a daily basis" and that at this time, notwithstanding the economic situation or even because of it, there are some firms that want to take advantage of the downturn.

In all, it means that there may or may not for the moment be further investments, but it is difficult to say.

Beijer believes that Bulgaria is a country with a great future, rich in resources, with an educated workforce and affordable wage levels and low operating costs, "so I think that they are going to do very well. But they still have a few things that they need to fix".

Bulgaria still is in the process of rejuvenating its industrial structures, "but I think that Bulgaria will find its niches – it has a lot going for it".

Contributing to the good relations is the work of the Swedish-Bulgarian Chamber of Commerce which supports business relations in both directions, and which includes among its members not only Swedish firms in Bulgaria but also Bulgarian firms with an interest in business with Sweden.

The Swedish Trade Council inaugurated an office in Bulgaria in the past six months, and recently Bulgaria appointed a trade counsellor in its embassy in Stockholm.

Beijer pays tribute to the team at the Swedish embassy, which is made up of three Swedish staff including himself, interns who come from Swedish universities to gain experience and a local staff of about eight. He emphasises that the Bulgarian staff are "excellent – I have never seen better and I have been to a number of embassies".

There are areas in which further potential exists, and important issues tied in to Sweden’s presidency of the EU which will start from July 1 2009.

One potential area which Beijer believes would make a lot of sense to bring to fruition has to do with a solution to Bulgaria’s waste problem.

"We have, up and running, the technology to manage waste by burning it and generating heat and power. You get rid of the landfill problem and you generate energy. That is something that we think is useful for Bulgaria for the future."

An important issue for Bulgaria and its northern neighbour Romania that will come up during the Swedish presidency of the EU is the CVM, the Co-operation and Verification Mechanism that was set in place when the two countries joined the EU at the start of 2007.

The CVM was put in place to prevent a delay in the accessions, even though it was clear that the two countries still had work to do in the justice and home affairs areas.
It was planned to run for three years, and this summer those three years come to an end.

The question is what will come next, and a decision on this issue will depend in large part on a forthcoming European Commission report, for which checks have been and are being done.

"The report will come after the (July 2009 parliamentary) elections," says Beijer, meaning that the issue will be squarely before the government in office then.

"Our position is clear. Bulgaria has done quite a lot but a lot remains to be done so there has to be a continuation to this process, and the question is, what do we do? Keep the CVM going, change it in some way?

"That, of course, is an issue of immediate relevance to Bulgaria. It won’t have to be tackled before some time in the autumn. The report has to come first, there has to be a Bulgarian government, and then there will be a discussion. So we have time," Beijer says.