As the COVID-19 pandemic grows the economic impact is difficult to predict. Countries around the world are taking unprecedented measures to protect SMEs and the markets.
The European Central Bank announced a €750 bln Pandemic Emergency Programme, The UK Chancellor of the Exchequer introduced an initial guarantee of GBP 330 billion to support the economy. Similar packages have been introduced by governments small and big.
The Government of Bulgaria is also implementing measures to limit the economic downturn. The Government has allowed for BGN 500 mln to be distributed as low-interest loans to businesses via the Bulgarian Development Bank. The Bulgarian National Bank is introducing BGN 9.4 bln worth of measures to support the liquidity of the banking sector.
Even though those are significant steps taken to protect the economy, it would be impossible to predict what Bulgaria’s economy would look like after the crisis is over. It is true that the current model of the economy is not diversified enough to protect it against a shock like this.
By the second half of the year a number of Bulgarian companies will be looking for inward investments to bring in more cash to continue operating. This might present lucrative opportunities for third-country investment. As East Asian economies are likely to have readjusted to the slump earlier and be in an expansionary mood, many investments may come from that part of the world.
Bulgaria has a highly-skilled technically-competent workforce. This is an inheritance from its Soviet-style educational system with a strong tradition in teaching mathematics and other STEM subjects. Bulgaria’s technology companies can be an attractive addition for business that would wish to further expand their presence in Europe.
Authors: Ivan Petrov and Kamen Shoylev
Acting for The Walt Disney Company in a dispute
TWDC is a global media player whose TV channels are distributed, inter alia, to Bulgarian viewers. NBLO assisted TWDC’s London office and TWDC’s English counsel in a dispute with a Bulgarian media sales agent which had withheld substantial sales revenue from our client in breach of contract. The dispute was governed by English law but involved substantial Bulgarian law issues relating to insolvency, civil procedure (including in particular enforcement, interim relief, issues of corporate capacity and private international law.
© New Balkans Law Office 2020