Declaration to the Political Parties

TO

MR. BOYKO BORISOV CHAIRPERSON OF THE PARLIAMENTARY GROUP GERB-SDS

MR. NIKOLAY DENKOV CO-CHAIRPERSON OF THE PARLIAMENTARY GROUP WE CONTINUE THE CHANGE – DEMOCRATIC BULGARIA

MS. NADEZHDA YORDANOVA CO-CHAIRPERSON OF THE PARLIAMENTARY GROUP WE CONTINUE THE CHANGE – DEMOCRATIC BULGARIA

MR. KOSTADIN KOSTADINOV CHAIRPERSON OF THE PARLIAMENTARY GROUP VAZRAZHDANE

MR. DELYAN PEEVSKI CHAIRPERSON OF THE PARLIAMENTARY GROUP MOVEMENT FOR RIGHTS AND FREEDOMS – NEW BEGINNING

MR. DZHEVDET CHAKAROV CHAIRPERSON OF THE PARLIAMENTARY GROUP DEMOCRACY, RIGHTS AND FREEDOMS

MR. ATANAS ZAFIROV CO-CHAIRPERSON OF THE PARLIAMENTARY GROUP BSP – UNITED LEFT

MR. BORISLAV GUTSANOV CO-CHAIRPERSON OF THE PARLIAMENTARY GROUP BSP – UNITED LEFT

MR. TOSHKO HADZHITODOROV CHAIRPERSON OF THE PARLIAMENTARY GROUP THERE IS SUCH A PEOPLE

MR. KIRIL VESELINSKI CHAIRPERSON OF THE PARLIAMENTARY GROUP PP MECH

OPEN LETTER

Dear Members of Parliament of the 51st National Assembly,

The last several very short-lived parliaments understandably could not address the promises that were made by politicians to business.

The issues important for Bulgarian business and for Bulgaria's economy that have been repeatedly postponed are transforming from important into ultra-urgent, and in the current geopolitical situation — into defining ones for the development of the country and for the future of everyone.

We declare that your real commitment and support for business and the economy, as politicians, will be measured in the coming months through your willingness to form a stable regular government that will do its job in resolving the critically important problems and challenges facing our country.

Those politicians who fail to secure a functioning government capable of implementing the much-needed reforms will send a clear signal that business, Bulgaria's economy and the improvement of the wellbeing of Bulgarians are not their priority.

Over the last three years we have been passing through a series of crises that have rarely in human history occurred simultaneously in a similar manner: a pandemic, a war, an energy crisis, inflation, a geopolitical and domestic political crisis, as well as a crisis of trust.

Alongside the crises, historic opportunities are opening up before us. We are witnessing a transformation of the world that can be compared to the entry of the Internet into our lives at the end of the 20th and beginning of the 21st century. The breakthrough in the development of artificial intelligence confronts us with challenges and opportunities that will bring prosperity to the countries that manage to respond adequately to the changes, and will place in a non-competitive position all those who miss the moment at which they must adapt to the new realities.

We consider that every political party that claims to support business and strives for economic development must take all necessary steps to achieve progress in the following areas:

1. Bulgaria's accession to the Eurozone

Anyone who has ever tried to attract an investor, client or employee from abroad has encountered the negative reputation of Bulgaria. Our accession to the Eurozone lies at the foundation of building trust and a better name for Bulgaria in the world.

Bulgaria's remaining outside the Eurozone places a stigma on business and on us, Bulgarians, which for a long time will be an obstacle to the development of our economy and to the possibility of more Bulgarians living better lives.

A regular government is needed to implement all the long-delayed reforms so that the country can complete its integration into the core of Europe.

A regular government is needed that will pursue adequate policy in the interest of Bulgaria and of the choice we made decades ago — to be part of Europe and of the democratic and free world. The responsibility is historic and political parties must set aside their short-term intra-party interests and personal ego in order to give our country a chance for prosperity as a full member of the European family.

2. Implementation of the necessary legislative and administrative reforms to guarantee the rule of law in our country

The issues related to improving the judicial system and the rule of law extend beyond the borders of our country and the business environment here. Entrepreneurs and companies constantly face difficulties due to Bulgaria's negative reputation and the mistrust towards judicial institutions. It is evident that there is no way we can be a preferred partner for global investors given the presence of so many scandals connected to our judicial system.

We call on politicians to prioritise the implementation of reforms related to the rule of law, because this will not only send a signal that Bulgaria is ready to improve the environment for doing business and investing, but it is also necessary in order to advance the reforms related to the Recovery and Resilience Plan.

3. Imperative reforms in Bulgarian education

Serious problems with finding qualified personnel are experienced by 70% of employers. The Bulgarian education system does not meet the needs of modern society and business. And 47% of pupils graduate as functionally illiterate people who do not possess the necessary skills and knowledge to build a successful or even a normal life. Business is forced to build its own academies and educational institutions, to finance and take on functions from which the Bulgarian education system has in practice abdicated. For companies, this represents a huge additional investment borne by business, so as not to pay the greater cost — the shortage of personnel.

The demographic crisis and the brain drain of talents and young people abroad is the greatest challenge facing Bulgaria. The shortage of people today is a topic for absolutely every industry in our country. Bulgarian business is placed in a far more disadvantageous position than its competitors around the world. The development of the labour market is not a priority for any party in our country.

In recent years there have been numerous reports from the OECD and other international institutions addressing the need for urgent and substantial reforms in our education system. Despite the direction of development being clear, results are lacking.

The strategies and legislative changes in the field of education and the labour market that need to be developed and adopted are such significant matters that they need to be a cross-party priority for all politicians.

4. Ensuring functioning regulators and institutions

Several successive parliaments have failed in electing the leaderships of a number of regulators and institutions, while people from the past with expired mandates remain in key positions.

The absence of a government creates an environment of uncertainty that prevents institutions from doing their work. The failure to elect leaderships of key regulators leads to the blocking of entire sectors of the economy. We consider that the election of the leaderships of regulators must be a priority in the agenda of the next National Assembly.

Without institutions with the necessary capacity and expertise, and without functioning regulators, Bulgaria irreversibly falls behind and operates with an agenda from the past. Bulgarian entrepreneurs and employers are ready to support governance and have proposals to assist the transformation of the country.

5. Accelerated catch-up on the backlog under the Recovery and Resilience Plan

Despite its stated intention, the 50th National Assembly failed to adopt the necessary laws with which to guarantee the payments under the National Recovery and Resilience Plan (NRRP).

We consider that if the reforms and the funds in support of our economy under the NRRP are of paramount importance, as declared by the political parties, they must find a way to have a government and a National Assembly with a long horizon, and must also show resolve in order to implement them.

6. Improving the conditions for encouraging investors

Bulgaria lags significantly in its policy for attracting and retaining investors. Our country is increasingly not even among the options being considered in the region, and investors prefer Romania, Greece, Serbia and Turkey. Neighbouring countries have a far more decisive, stable and effective policy for attracting and retaining investors. The Law on Investment Promotion does not simply need to be revised. Our country needs a comprehensive policy in this area that corresponds to modern realities, economic trends and competition on a global scale.

The solution lies in improving policies for attracting foreign investors through: the introduction of an objective points-based system for determining the level of direct financial incentives for manufacturing investments; reducing and simplifying the qualification thresholds for investors; qualifying regions of Bulgaria according to the level of development by unemployment rate and average wage. These measures are extremely urgent and even overdue, because countries neighbouring Bulgaria are succeeding in attracting numerous investments.

One of the main reasons for these successes is that the average regional state aid granted to investors in countries such as the Czech Republic, Slovakia, Hungary, Serbia and Romania is between 15–45% of the investment made. In Bulgaria it is under 3%.

It is time to transform Bulgaria into a good place to live, with high standards, into a place for honest and free business, into a preferred investment destination, into a country with a vision for the future and with a genuine rule of law, to restore in people the sense that there is justice. We call on all political forces for more reason, wisdom and courage — it is time for a regular government, a government of unity in the name of Bulgaria's future.

Yours sincerely,

Association for Innovation, Business Services and Technologies (AIBEST)

Bulgarian Association of Software Companies (BASSCOM)

Bulgarian Entrepreneurial Association (BESCO)

Bulgarian Employer Association for Innovative Technologies (BEAIT)

Bulgarian Association of Information Technologies (BAIT)

Bulgarian Public Relations Association (BAPRA)

Bulgarian-Romanian Chamber of Commerce

ICT Cluster