In a year beset by the tribulations of the global financial crisis, the German minister of economics and technology Michael Glos celebrates the German economy’s triumph. Sounder public finance, rising employment and falling unemployment, growing individual incomes and broadening opportunities for local companies underpin its achievements and feature in the country’s Annual Economic Report 2008.

For yet another year, Germany has retained its title as the world’s top exporter, forming 47 per cent of its GDP from export activities (UNDP, World Investment Report 2008). It has at the same time continued its investment march abroad. One telling sign is that half its exports come from investment goods, plants and equipment abroad.

As an open and thriving economy Germany can hardly miss targeting Bulgaria as a trade and investment partner. All the more so since Bulgaria is part of Central and Eastern Europe, a market Germany has been industriously – and successfully – courting over its high growth potential, politico-economic stability and geographic proximity. Growth in foreign trade exchange with this region, Germany’s foreign trade statistics reveals, has steadily been in double digits. Dynamics with Bulgaria in particular runs the same trail.

In 2007, Bulgaria’s exports (in FOB prices) to Germany hit 1.39 billion euro in what is a 19.5 per cent year-on-year increase, consolidated figures of Bulgaria’s statistical office show. Imports in CIF prices were up 19.4 per cent on the year to 2.7 billion euro. With exports and imports accounting respectively for 10.3 per cent and 12.3 per cent of Bulgaria’s 2007 total, Germany is among Bulgaria’s top three trade partners.

At 4.09 billion euro, trade turnover is double the 1.899 billion euro achieved in 2002, the year holding the bilateral trade record since 1990. Projections by local analysts see turnover this year hovering around four billion euro as well.

Trade structure has sustained a no less a stable pattern. Bulgaria mainly exports apparel, machine building and agricultural, metal, chemical and pharmaceutical products. The major cut in imports is machines, electrical and electronic goods, vehicles, optics and measurement gadgets, and chemical goods.

However good its perennial surge, mutual trade penetration has also reaffirmed disparities in import-export volumes. Germany’s efficient instrumentality in promoting foreign trade has effectively turned the odds in its favour. Its exports are invariably double Bulgaria’s imports.

Germany’s foreign trade expansion rests on three institutional pillars: the German Office for Foreign Trade, a federal structure mediating German companies’ foreign exploits and ushering foreign companies into testing German conditions; the economic departments adjunct to embassies; and bilateral chambers of commerce. The work of federal structures finds ample support in mirror state-level structures.

The German-Bulgarian Chamber of Commerce and Industry (GBCCI) is arguably the chamber to enjoy the largest membership in Bulgaria. Presently, 430 companies feature in the GBCCI list. Their number is likely to reach 500 by 2010, GBCCI chair Mitko Vassilev told Klasa newspaper.

Speaking to The Sofia Echo, German ambassador to Bulgaria Michael Geier said that although there were large players, small and medium-sized enterprises formed the bulk of the German investment community in Bulgaria. Many of their production facilities and trade offices have come ashore in the hinterland, thus creating jobs for people in less developed regions.

Smaller size, however, has resulted in smaller investments. Unlike strong trade performance, Germany holds seventh position in Bulgaria’s investment-by-country chart with 893 million euro for 1996/2007. A chart breakdown shows that annual investments exceeding 100 million euro are rather outliers than trend-setters. Between 1996 and 2007, only the years 2004 and 2006 exceeded this benchmark with 276 and 110 million euro, respectively, and 2002 and 2003 were just short of it (90.8 and 96.1 million euro). Last year, the investment count stopped at nine million euro.

Geier said these figures oversimplify the real situation, adding: “Quite a few of the large investments, although statistically accounted as Austrian or Dutch, have been indirectly German.” The reason is that Austrian or Dutch-registered companies such as Billa or Bank Austria Creditanstalt are 100-per-cent owned by Germany’s Rewe and former HVB (now part of UniCredit Group).

Nonetheless, he admitted that Bulgaria was not as attractive to German firms as, say, Romania with its bigger size and ethnic German minority or neighbouring Poland and the Czech Republic. Quite often Bulgaria loses out to these countries on German investment projects despite the identical set of investment incentives.

Yet German investments are predominantly strategic and more than half of them are greenfield, a snapshot of Bulgarian Economy and Energy Ministry on Germany reads. Among the largest investors are energy giant E.ON, media group WAZ, cement producer Heidelberg Cement, developers Lindner International and ECE Projectmanagement, retailers Kaufland and Metro, and financial groups Allianz and ProCredit Bank.

According to Vassilev, Germany remains an untapped territory for Bulgarian investors because few have the necessary size and financial strength to effectively compete with Germans on their local turf.

Despite the one-way investment flow, business interest has been mutual. It has been kept warm through a busy and continual agenda of bilateral political and business visits. And there is one to look forward to. The Co-operation Bourse, organised by GBCCI, will take place on September 30 in the sidelines of the International Technical Fair Plovdiv and will create networking opportunities between 21 companies from Bavaria and Baden-Wurttemberg and interested Bulgarian companies.