For Belgium, it is business as usual – and the evidence is right here in Bulgaria.
On international news websites, Belgium lately has been mentioned mainly in the context of its politicians’ record-setting inability to form a government after the June 2010 elections.
Does this, however, affect the country’s daily business and bilateral relations? The answer, it appears, is no. In the case of Bulgaria, for instance, trade, political and cultural relations are coming along just fine; and outside the sphere of politics, Belgium notched up a place as the second-largest investor in Bulgaria in 2010, going by Bulgarian National Bank statistics.
Ambassador Marc Michielsen says that the long period that the caretaker government has been in office has led it to behave in a way that a temporary administration customarily would not, such as coming up with a budget and, no less, carrying out with aplomb the six-month presidency of the European Union in the latter half of 2010. Belgian prime minister Yves Leterme travelled to other EU countries, stopping in Sofia in November 2010 where, among other things, he issued encouragement to the country’s Schengen visa zone aspirations provided it met the technical criteria for membership.
In 2010 the net investment flow from Belgium to Bulgaria amounted to 193.3 million euro. That is three times more than in 2009 (69.7 million euro) and the best result since the record year 2007 (544.8 million euro), when Belgian financial group KBC entered the Bulgarian finance sector.
In 2010 KBC was responsible for the lion’s share of Belgian investments. Other companies that show up in Bulgarian National Bank statistics are Sensornite, Dekaphos, Puratos and Electrawinds. In the period 1996-2010 Belgium and Luxemburg together are the seventh foreign investors on average.
KBC said on December 7 2010 that it had acquired full control of Bulgarian lender CIBank by buying out the remaining 16 per cent held by Tsvetelina Borislavova.KBC thus became the sole shareholder of the company, after having bought a majority stake in 2007. It was the sixth-largest mergers and acquisitions deal in Bulgaria in 2010.
Pending approval from various countries’ anti-trust supervisory bodies, Belgium’s Delhaize is in the process of taking over Serbia’s Delta Maxi, which in turn since 2007 has been the owner of Bulgarian retail chain Piccadilly. Delhaize Group acquired 100 per cent of Maxi for 932.5 million euro.
Belgian supplier of fresh fruit and vegetable, Univeg, inaugurated a state-of-the-art coldstore in nearby Elin Pelin on May 16 2011. The storage and distribution facility is situated in a prime location, close to Sofia and to the two major highways to Varna and Bourgas.Univeg delivers fresh produce to, among others, Metro, Billa, Burger King, Subway and KFC.
Solvay announced on February 21 2011 that it had acquired a fluorspar mine from the N&N group in Chiprovtsi In April 2010, Solvay Sodi celebrated the opening of a new state-of-the art boiler to generate steam for its soda ash production plant in Devin.
Michielsen noted that many investments were done by investors already in the country.
"That is why I always try to convince Bulgarian friends that it is important not only to attract investors but also to keep them because they would be the first, for example after a crisis, to engage in further investments. Sometimes, investment decisions are not linked to whether or not there is a crisis, but are part of a long-term strategy. The fact is that they are good for the country and give long-term stability."
Positives and negatives
For Michielsen, who has been Belgium’s ambassador in Sofia since October 2008, there are structural advantages that encourage people to invest in Bulgaria but the country also has its weaknesses.
A positive is Bulgaria’s 10 per cent tax rate, significantly lower than in Belgium, that Michielsen says can be a trigger for Belgian investors to come to an EU country with a vastly lower tax burden. Job creation in Bulgaria in turn creates high-quality jobs in Belgium, although he underlines that this does not mean that Bulgaria is nothing more than a low-income basic service provider, giving examples of forward-thinking business people he has encountered who are strategically and actively engaged in preparing for the future.
Another positive is the fact that Bulgaria still has people with good technical and linguistic skills "even though it is becoming more difficult to find the right people". As a rider, he cautions that if Bulgaria wants to continue to be attractive to foreign investors, language skills have to be expanded.
He gave the example of attending, along with visiting delegations, meetings with chambers of commerce and local companies where no executive had the language skills to engage directly with the visitors. Chambers of commerce should step in to offer language courses to assist their members, he suggests.
Weaknesses, according to Michielsen, are the continuing burdens of red tape and the fact that the court system continues to be tardy. However, he warns against unreasonably high expectations of rapid change.
Overall, he says, "I see some small lights that give me hope that there is a turn in the right direction".
As noted, on the sensitive issue of Bulgaria’s accession to Schengen, Michielsen says that prime minister Leterme said that Belgium supported Bulgaria’s joining the visa zone once technical criteria were met.
As to foreign policy overall, Michielsen says that he has understood Bulgaria’s foreign policy priorities to be EU enlargement, in the context of the Western Balkans, the Middle East and the Black Sea region.
On enlargement, there is a dovetail, given that Belgium’s EU presidency included this as a priority, and like Bulgaria, saw the process playing out on the basis not of a "big bang" expansion but on progress depending on would-be member states meeting the criteria set out in EU rules.
Under Foreign Minister Nikolai Mladenov, Bulgaria had "rediscovered" the Middle East, in the months before the current turmoil. The very fact of the process unfolding in the Middle East and North Africa and the fact that the region neighbours Europe made it a very important concern to all EU states, Belgium among them, Michielsen said.
As for the Black Sea region, energy is an important issue, even given the differences in situations and policy approaches among individual EU states, he said.
Against the background of Belgium’s own grappling with the issue of diverse communities and the question of integration, including the country’s decision to impose a burqa ban, Michielsen was asked about his views on the situation in Bulgaria.
"When it comes to people of different ethnic and religious groups living together, it is important to try to prevent a vicious cycle that leads to racial and religious intolerance.
"After the (May 2011) incident at the Sofia mosque, I must say I was positively impressed by the mature reaction of the political parties here – leaving aside the political party that started the incident – that across the spectrum, the view was that this should not be misused for short-term benefits. That is, in my opinion, a positive sign about the political development of Bulgaria".
During Belgium’s EU presidency, cultural engagements were especially active.
Belgium’s Jef Neve trio performed in Sofia to launch the six-month presidency, in October works by Rene Magritte were displayed at the GreenCat Gallery (coinciding with a Belgian food week at the Hilton Sofia), Belgian musician and composer Wim Mertens performed at the National Palace of Culture at the close of the Belgian presidency while in April 2011, an exhibition entitled ABC: Contemporary Belgian Art was held, featuring 23 works by 20 major artists based in Antwerp, Brussels, Ghent and Liege, who have influenced the development of contemporary European art.
With the latter exhibition, in which Patrick Sandrin played a major part in organising, Michielsen was impressed to note how the Sofia City Art Gallery was rearranged to accord with the display of the digital/video art on show – a fact that, he notes, appeared to be a first for a gallery to come into line with practice in major cultural capitals in Europe.
Then, of course, there are the continuing people-to-people contacts. Belgium was a stalwart ally of Bulgaria in this country’s pre-accession process and provided experts to help in a range of fields, notably in giving guidance on social services issues. Even today, the contacts made continue to serve as people draw on connections made to the continuing benefit of Bulgaria.