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Were Bulgaria & Romania ready to join the EU? A discussion on the EU membership of Bulgaria and Romania in 2007

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ING Group Greece - Sidma SA - Telesis Securities

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  1. Abstract.
  2. Introduction.
  3. The transition to free trade.
  4. Bulgaria, Romania: the evolution of their economies (1997-2003).
  5. Comparison to Central & Eastern European entrants (2003-2005).
  6. Observations for Bulgaria (2005).
  7. Bulgaria, Romania and the EU membership.
  8. Conclusions.

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. [...]

[...] Comparison to Central & Eastern European entrants (2003-2005) The paper samples Central & Eastern European (CEE) countries, which joined the European Union in 2004 and uses their performance to compare the performance of Bulgaria and Romania for the period 2003-2005 (Table 3). Observations for the CEE countries (2005) GDP: five out of the eight CEE countries ( 62.5 have an increasing GDP growth rate. Given that the Gross Domestic Product (GDP) is a measure of the macroeconomic activity defined as the total market value of all goods and services produced in a country usually during one year, the increasing rate in the specific countries indicates that they are relatively fast growing economies. [...]

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