Sixty per cent of Bulgaria’s business leaders expect the country’s European Union accession to be beneficial for the Bulgarian economy, while 11 per cent believe that it will be highly beneficial.

This emerges from a survey in January 2007 by the local subsidiary of Greece’s largest consulting and business information company. ICAP Bulgaria surveyed domestic firms on the theme of challenges facing Bulgarian companies after EU accession.

ICAP president and managing director Napoleon Karantinos, who also heads the local unit, announced the survey results in Sofia’s Sheraton Hotel on April 24, in the presence of Deputy Economy and Energy Minister Anna Yaneva and representatives of local businesses.

In a speech, Yaneva emphasised that it was of the utmost importance for Bulgaria that it became part of the “big European family”. She said that local firms and institutions would be following European rules created over dozens of years.

Karantinos said that the survey was done by telephone with a sample of the 600 top Bulgarian companies ranked by turnover. A total of 204 responses were collected implying a response rate of 34 per cent. The survey was based on a structured questionnaire prepared by ICAP Bulgaria and conducted by TNS BBSS. Coface Bulgaria provided the data set, which included company turnover, employment, contact people and their details.

Nearly three quarters of the respondents were chief executive officers and managing directors, 16.2 per cent were chief financial officers and proprietors were 8.3 per cent of the sample.

Industry and services accounted each for about 35 per cent of the responses, commercial firms were 23.4 per cent and construction five per cent. The share of joint stock companies in the sample was 42.3 per cent, while limited liability firms were 25 per cent.

Companies with one shareholder, in most cases local subsidiaries of foreign groups, accounted for more than a quarter of the sample.

Less than five per cent of those polled were worried about the effects of accession. Nearly a quarter of the firm leaders polled expected the EU impact to be neutral and 1.5 per cent answered that they were not in a position to evaluate the effects.

The expectations of Bulgarian business leaders on the effects of EU accession on the economy in general and on their companies in particular did not differ much. Most respondents expected that joining the EU would benefit their firms (68.1 per cent). The share of those expecting negative impact was 2.5 per cent.

Moreover, 24 per cent of those polled said that the overall effects would be neutral, presumably because benefits offset costs. It appears that top executives of local companies correlated the effects of EU entry on their companies with those on the economy in general.

These results are particular to large companies and most probably do not represent small firms’ views and expectations. The reason is that there is a big gap between the performance, successes and problems faced by small and large enterprises, according to ICAP.

Construction, other services and banking, insurance and finance proved to be the most optimistic sectors. The share of “neutral” firms was higher in manufacturing and commerce.

The main benefits to the economy are expected to come from increased inflows of foreign investment funds and of EU transfers, the survey showed. Moreover, the economy will benefit from higher stability in economic policy, from conformity with EU regulations and from increased competition, which raises efficiency and ultimately welfare.

Bulgarian business leaders considered the main opportunities for their companies were the improvement of the business climate, which would reduce risks and improve efficient decision making; EU regulation adoption, which would facilitate modernisation and enhance competitiveness; increased scope for co-operation with other European firms and effective expansion of Bulgarian firms abroad, as well as greater stability of economic policy.

The survey results also showed the business elite was not insensitive to threats. The major source of concern was the perceived limited experience of Bulgarian firms in world markets and expected intensification of competition. Other serious threats would come from the easier entry of foreign firms in the country and the small scale and low-tech production techniques used by local companies.