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Opinion of the UPEE on the recovery plan and sustainability of the Republic of Bulgaria

Coworkers team brainstorming

The Union’s principled position for an economic initiative is to find a balance, on the one hand, between the sources of funding themselves (IEPs, operational programs, the Three Seas Initiative, the national budget) and, on the other, the long-term goals. Undoubtedly, the Bulgarian economy must “climb” on value added, but setting this goal, we must take into account the micro and small enterprises operating in the so-called. “Traditional” low value-added businesses, because support should not lead to deepening differences between companies in different segments.

We support the already expressed opinion that the funds allocated in the PSU for direct stimulation of the economic recovery in the country continue to be insufficient.

Our experts believe that funds should be reallocated to the Economic Transformation Program and the Digital Skills Training Program and that a national online platform for adult learning should be set up so as to ensure that support is reached to the widest possible range of micro, small and medium-sized enterprises, without significantly delaying the procedure for its approval and negotiation.

At the same time, it is possible to make some significant revisions to the Economic Transformation Program.

  • With regard to the issue of the ratio of grant schemes and financial instruments (debt and equity), we believe that the approach must be differentiated. In the Bulgarian economy there are huge differences between micro and small enterprises on the one hand and medium and large enterprises on the other hand, as well as between enterprises from different economic activities. For micro and small enterprises, the successful use of financial instruments is only possible for businesses in fast-growing sectors, such as the IT sector. For more traditional economic activities with low added value, the use of grant support is particularly urgent. Otherwise, these companies will not be able to start their transformation and modernization.
  • The low level of domestic private investment continues to be a problem, especially in the segment of micro and small enterprises, and there is a decline in foreign direct investment. In order for our economy to follow the path of R&D and innovation, above all, the manufacturing sector must be renewed and modernized with equipment. That is why, in our opinion, the targeted impact of the Technological Modernization Fund should be strengthened.

Only the high-tech productions and the high-tech services with intensive use of knowledge will have access to direction 1 “Modernization of the next generation”. In this area, given the state of the high-tech sectors, financial instruments can be given precedence.

In Strand 2 “New Technologies and Equipment”, the scope of potential beneficiaries should be expanded, using different ratios of grants and financial instruments according to the different schemes applied.

Under the Technological Modernization Fund, we propose to preserve 30 or 40% of the resource for micro and small enterprises.

  • nder Fund 2 “Green Transition” we propose in Area 1 “Decarbonization” to supplement the facilities for mixed use of fuels – traditional and hydrogen, which also leads to a reduction in the carbon footprint. The funds under Area 1 should be increased and the eligible projects and activities should be diversified.
  • Under Fund 3 “Support for digitalization in enterprises”, Strand 1 “Support for digitalization and cybersecurity” we support the proposed voucher scheme for SMEs, believing that this is one of the mechanisms for rapid provision of funds and at the same time provides greater accessibility for micro and small businesses.
  • Under Fund 3 “Support for digitalization in enterprises”, Area 2 “Creation of digital innovation hubs” the allocated resource of BGN 21 million is extremely insufficient and we propose to double it (BGN 42 million). This adjustment will allow the creation of at least 1, and in some regions 2 Digital Innovation Hubs. Given their purpose, supporting the digitalisation of SMEs and the public sector, and taking into account the different economic activities that may exist in a region, we believe that the CECs have the potential to become catalysts for added value in different regions. The need for specific technological and economic specialization of the CIH can lead to uncovered sectors.
  • Greater accessibility for micro and small enterprises throughout the Economic Transformation Program should be ensured.

Разширяването на достъпността на микро и малките предприятия може да става чрез запазване на процент от предвидения ресурс за микро и малки предприятия.

In addition, we believe that new application models need to be developed, in which simplified procedures are applied within the limits allowed under the European framework. This will allow micro and small enterprises to handle applications under the schemes on their own, without having to use expensive consultancy services.

  • Promoting it “on the ground” is important for the success of the Economic Transformation Program and for ensuring accessibility for SMEs. In this sense, the resources of the District Administrations, local authorities should be activated and together with the social partners to assist in disseminating the necessary information.
  • The resource for innovation should be allocated to a new fourth fund within the Economic Transformation Program.
  • Apart from the Economic Transformation Program, it is necessary to direct resources to Project 3 PRO-DI-GI Platform, Component 2 Trainings for digital skills and competencies, increasing the number of target groups of learners: from 500,000 to 600,000 people who have passed trainings and from 100,000 to 120,000 certified persons.