Greek investments in Bulgaria: what will happen after Covid-19? / Bulgaria / Regions / Homepage

On the border between Greece and Bulgaria – © Dusan Ninkovic/Shutterstock

A seminar discussed regional relations in Europe during the pandemic, with Greece-Bulgaria relations among the case studies. But local-scale data would be needed to fully understand the situation, said ESPON’s Nicolas Rossignol, and there is little available.

Has the Covid-19 pandemic strengthened or weakened the links between European regions? The question was the subject of a seminar during the nineteenth edition of the European Week of Regions and Cities, which this year took place from 11 to 14 October.

Asking about the present and future impact of the COVID-19 pandemic on relations between European regions, various case studies were reported, including that of Foreign Direct Investment (FDI) from Greece to Bulgaria.

The study, led by Dimitris Kallioras, Panos Manetos, Lefteris Topaloglou, Maria Tsiapa, Maria Adamakou and George Petrakos (University of Thessaly, Greece), seeks to understand to what extent the current pandemic discourages Greek investors and companies from investing and to relocate to Bulgaria, thus reversing a long-term trend: between 2000 and 2020, in fact, 15,000 Greek companies relocated to Bulgaria, for a total of more than 3 billion euros in FDI.

The phenomenon is certainly due to Bulgaria’s entry into the EU in 2007, which removed many logistical and bureaucratic obstacles to relocation, but also and above all to the contemporary financial crisis which has hit Athens with particular severity. In this context, many companies preferred to move to neighboring Bulgaria, a State which, unlike Greece, could boast of a sustainable debt/GDP ratio, low levels of unemployment, and above all a more low and a stable tax system. In this regard, it should be noted that a significant number of Greek companies in Bulgaria do not have employees, which proves that several entrepreneurs probably only used relocation as an expedient to escape the Greek tax regime. .

Available regional data confirms the above-mentioned trends: between 2010 and 2018, the Sofia region received 85% of Greek foreign direct investment. The latter came mainly from the Athens region – 82%. Finally, about 12% of Greek foreign direct investment in Bulgaria arrives in direct border regions with Greece.

The restrictions due to the ongoing pandemic and the resulting economic uncertainty have caused a sharp reversal in this trend, of uncertain duration and impact. In order to provide additional reading on the possible future implications of this huge flow of investments, the researchers decided to interview a significant sample of companies operating in Bulgaria.

According to the interviewees, the main attraction for Greek investments in Bulgaria is a more favorable and efficient institutional environment, both in terms of taxation and in terms of political and economic stability. The proximity of Greece and the lower cost of raw materials also play a fundamental role in this choice. The emergence of the pandemic crisis seems to have had a more negative impact on older investments, especially those over 5 years old, and on small and medium-sized enterprises operating in the most peripheral areas. While the companies surveyed praise Sofia’s timely measures to combat COVID-19 and its impact on the economy, most are pessimistic about a recovery of Greek investment in Bulgaria in the short term. This calls for caution in withdrawing public aid to the economy, at least until the flow of orders and customers returns to levels comparable to those of the pre-pandemic period.

The interviews collected shed light on the role played by the uncertainties linked to the pandemic crisis in the reduction of Greek investments in Bulgaria, while their return to pre-2020 levels – if it ever occurs – appears as a fairly hypothetical distant, difficult to reach in the short term. . Moreover, as pointed out at the beginning Nicolas Rossignol – Head of Unit for Territorial Evidence and Awareness Activities of European ESPON Program – it is clear that there is an increasing need to develop and analyze a new set of statistics to complement traditional aggregate data at the national level, as the latter tend to neglect the specificity of contiguous geographical areas and their particular exchanges of goods, people and resources.

The European applied research program ESPON – co-financed by the European Regional Development Fund – aims to remedy this deficiency by providing local policy makers with an innovative and better calibrated understanding of reality. The intention is to promote a new understanding of European dynamics on a regional basis, in order to provide different lenses through which to interpret European complexity more accurately.


ESPON (European Spatial Planning Observation Network) is an EU program aimed at creating a European applied research network, with the aim of supporting cohesion and territorial development policies in Europe. Through its activity, ESPON processes and provides analyses, data and statistics on territorial trends, essential both for an in-depth understanding of European complexity and to be able to intervene in all conscience in the field of territorial cooperation. From economy to society, from migration to the environment, the program aims to provide local policy makers with new tools for interpretation, capable of promoting harmonious territorial development of the different European regions.

This content is published as part of the “Work4Future” project co-funded by the European Union (EU). The EU is in no way responsible for the information or opinions expressed within the framework of the project. Responsibility for the content rests exclusively with OBC Transeuropa. Go to “Work4Future”

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