On the birth of 2007,
Romania and Bulgaria ascended into the European Union,
bringing the total number of EU member countries to 27
and nearly 500 million denizens.
Both nations face strenuous
transition hurdles, particularly in adapting their
economies to the pace and versatility of their EU member
colleagues, but both Romania and Bulgaria have already
risen to their obligations in obtaining EU membership
and both economies should follow in suit.
In a land sprinkled with
fairy-tale castles and the lore of Dracula, medieval
cities and Black Sea resorts, Romania’s renaissance grew
out of the need to change economically. The end of an
era, a Soviet grip over the region for nearly a
half-century, started a process that reached its
pinnacle at the dawn of 2007.
“You know that Romania made
a fundamental choice in December 1989. That choice was
the only choice and it was the only sound choice as to
have a democracy and a market economy based on economic
freedom in a country that was devastated by 50 years of
communism,” Romania Consul General in Los Angeles,
Catalin Ghenea, wrote in an email response to European
“This year, Romania has
fulfilled one of its strategic objectives, through its
full-fledged membership to the European Union,” Ghenea
Romania signed the EU
Constitution in 2004, but has yet to ratify it.
According to Ghenea, the Romanian government does not
see any problems looming with the ratification, only the
concessions the government must make in the process.
compromises, the European Constitution is far more than
a meeting at the lowest common denominator. It achieves
a fair balance of interests between large and small, old
and new member states,” Ghenea wrote.
Concessions to EU policy may
include economic and security adjustments, one of which
means falling in line with economic performance gauges.
Romania plans on adopting
the EU currency a few years from now when the economy
meets the Maastricht convergence criteria, a set of
budgetary principles that guide EU member state
finances, after the country’s economic probation period.
“It is foreseen that Romania
will enter the Euro zone around 2012 or 2013, depending
on its economic performances,” Ghenea wrote.
Economic transition concerns
still plague former Soviet-bloc states that try to keep
pace with their Western Europe counterparts. According
to the CIA-Factbook, Romania holds a 7.7 percent
unemployment rate as of 2005. According to Ghenea, the
national unemployment rate in 2005 was 5.9 percent. The
numbers most likely differ in calculation methods, but
the contrast represents how external analysts view the
economic viability of Romania compared to internal
Under EU auspices, Ghenea
believes a steady downward trend in unemployment will
For the past six years,
Romania has maintained a growth rate double the EU
average. Between 2007 and 2009, Romania will receive
about $14.3 billion (11 billion Euros) in funds from the
EU budget for agriculture, structural actions and
“It illustrates a win-win
situation, it reflects the achievement of a long road in
which Romania and the EU have worked together to make
sure that the enlarged Europe is a stronger, more
democratic one,” Ghenea wrote.
Bulgaria, the other country
to obtain EU membership status in 2007, signed the EU
Accession Treaty in 2005. Bulgaria’s dilemma stems from
a quickening of economic development with the lack of
experience, similar to Russia’s post-communist economic
“EU membership will increase
investors and trade partners’ confidence, thus increase
the inflow of capital, hence economic growth,” Bulgarian
Foreign Investment and Commercial Advisor, Pavel
Stamboliyski, wrote in an email response to European
“Bulgaria will also receive
funding from the EU, part of which will be used to
improve infrastructure (in particular, road
infrastructure) which will further boost investments and
economic growth,” Stamboliyski wrote.
Bulgaria holds a low
corporate tax rate compared to other Balkan states, yet
inflation grew at 6.2 percent in 2004 and 5 percent in
2005. Gross Domestic Product, a gauge that reflects a
country’s total economic output, grew at nearly
identical rates that GDP did in the same years,
according to InvestBulgaria Agency statistics.
This may lead to more
investors outsourcing to other destinations.
“Some investors are afraid
that EU membership will inflate prices and labor costs,”
Stamboliyski wrote. Yet, he remains confident EU
membership will convince other EU members that Bulgaria
is the right country to invest in.
“We believe that EU
membership will further spur investment and economic
growth and thus reduce even further unemployment,” he
The unemployment rate in
Bulgaria currently hovers around 9 percent, a percentage
point above the EU’s unemployment rate.
In 2006, Bulgaria acquired
more than $4.5 billion in foreign investment, a tepid
quantity compared to most other EU member states, but
far out-pacing other Balkan region economies, according
to InvestBulgaria Agency statistics.
However, Bulgaria will feel
pressure to remain competitive with its larger, more
economically diverse EU colleagues.
“The immediate pressure will
be on local companies to achieve competitiveness and
productivity at a level similar to their EU
counterparts,” Stamboliyski wrote.
“In general yes – we don’t
want to be trailing EU countries in terms of wealth,” he