In 2007, Bulgaria and Romania joined the European Union. Bearing completely different economic and socio-political features than most of the older EU members, particularly their Western partners, Bulgaria and Romania are the poorest among the EU-27 member states. Since they started altering their political and economic environment in order to acquire the EU membership, they accomplished much but not in areas like crime, corruption, border controls and obsolete ways of administration.
This paper discusses the EU membership of Bulgaria and Romania. Due to the same political and economical system of the Central & Eastern European (CEE) countries with Bulgaria and Romania, the paper performs a macroeconomic comparative analysis to the CEEs that joined the EU in 2004 and it investigates the evolution of the Bulgarian and Romanian economies for the period 1997-2003. In addition, it assesses the performance of Bulgaria and Romania after the EU membership concluding that free market economy has created the grounds for the improvement of the socio-politico-economic setting of Bulgaria and Romania. The Balkan pair was ready to join the EU, although having corrupted officials has also partially impeded the smooth transition to fully-functioning markets in both countries.
Keywords: free market, European Union, FDI.
[...] Table Bulgaria- Romania in comparison to CEEs (2004 EU entrants) Indicators Real GDP growth Real GDP Per Inflation Outward FDI Inward FDI Capita growth (as % of GDP) (as % of GDP) YEAR Czech Republic YEAR Czech Republic Adapted from Eurostat Bulgaria Bulgaria continues to attract a lot of foreign companies through FDI and will proceed to further privatization of Bulgarian companies through the Bulgarian stock exchange. Moreover, given that Bulgarians would like to keep their national identity as they step towards a new future in Europe, the Bulgarian government will continue to put great effort in making Bulgarian people feeling secure enough to start generating extra revenue. [...]
[...] Romania Similarly like Bulgaria, the contraction of trade as a result of the organizational and administrative crisis in the former Soviet Union, led to a sharp drop in output and employment in all of CMEA members of Eastern Europe, including Romania (Gács, 2002). The Romanian economy experienced insufficiency in exports, desertion of heavy industry, and retrogression of agriculture. In addition, the pile up of foreign debt and the deficiency of product competitiveness required the transition to a free market economy. [...]
[...] In the following pages, the paper discussed the transition of Bulgaria and Romania to free trade Bulgaria In the 1990, the organizational and administrative crisis in the former Soviet Union along with the switch to world market prices and settlement in hard currencies and a sharp deficiency of foreign exchange in a number of countries led to a decline in trade among the members of Council for Mutual Economic Assistance (CMEA). The contraction of trade led to an acute plummet in output and employment in all of CMEA members of Eastern Europe, including Bulgaria (Gács, 2002). [...]
[...] This paper discusses the EU membership of Bulgaria and Romania in 2007. In section the transition to free trade is explained focusing on the transition of Bulgarian and Romanian economy to free market. The evolution of the Bulgarian and Romanian economy in the period 1997-2003 is presented in section while a macroeconomic comparative analysis to the CEEs that joined the EU in 2004 for the period 2003-2005 is performed in section 3. In section the paper assesses the current situation of the Bulgarian and Romanian economy. [...]
[...] Romania In 1970's Romania resorted to credits from the West promoting a policy of heavy domestic investments and increased production. Based on the gains generated by a strong export activity, the Romanian government hoped to pay back its loans to Western lenders and realize a surplus that would allow Romania to evolve from its underdeveloped status. Yet, in 1980´s, Romania's exports proved to be insufficient for generating enough income for the desired outcome. As a result the Romanian government imposed strict measures in order to help the country overcome its financial trap over the 1990's. [...]
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