Vladimir Mitev
As of 2023, Viktor Gugushev is Chairman of the Board of Directors of the Bulgarian-Romanian Chamber of Commerce (formerly known as the Bulgarian-Romanian Chamber of Commerce and Industry). This is an association of some of the most important Bulgarian and Romanian companies doing business in both countries and is based in the city of Ruse. The first part of the interview with Viktor Gugushev was dedicated to the difficulties of crossing the Friendship Bridge, which arose after the start of its renovation on the Bulgarian side on July 10, 2024, and the solutions proposed by the Chamber. The current text is the second part of the interview, which focuses on the Chamber’s attitude towards strategic issues – such as energy connectivity, the war in Ukraine and their impact on the economy of both countries, the Chamber’s position on the removal of land border controls between Greece, Bulgaria and Romania, the level of confidence in Bulgarian business in Romania and how the Chamber supports Bulgarian and Romanian companies that want to do business in the other country.
The interview was conducted on July 24, 2024. The whole interview can be listened to here with Romanian subtitles and the transcript of the second part is below.
Mr. Gugushev, you have been at the helm of the Bulgarian-Romanian Chamber of Commerce and Industry for some time. What are your ambitions for the Chamber’s development?
I have been at the presidency for almost a year. My ambitions for the development of the Chamber are to make it much more recognized, with a much greater representation among Bulgarian companies in Romania and among Romanian companies in Bulgaria. In my opinion, the Chamber has developed in a very positive direction during the period of my presidency. This happens with the support of the board, the team and the chamber members.
In this almost one year we have managed to double the number of member companies. It is an undeniable success that we are the only chamber of commerce in Bulgaria where both ambassadors of the respective countries are honorary members of our board. I mean, Mrs. Brăndușă Predescu, who is Romania’s ambassador to Bulgaria, has agreed to be an honorary member of our board. Ambassador Radko Vlaykov also accepted this invitation on our behalf.
This shows, first of all, the strong legitimacy of our organization, which is recognized as a key partner of embassies. It shows the strong support that we have from the diplomatic missions themselves, because, after all, we are a bilateral chamber and for us cooperation and good partnership with the respective embassies is of the utmost importance.
Let me now make a small comment on some of your questions. We are no longer an industrial chamber. As of May 2024 this year, the General Assembly also changed the name of our organization. We used to be the Bulgarian-Romanian Chamber of Commerce and Industry and today we are the Bulgarian-Romanian Chamber of Commerce. Besides changing our name and increasing our membership, we are officially working on a new vision for our online presence. We will present it in September.
In addition, we have accepted outstanding successful Bulgarian entrepreneurs as board members and expanded our board. So, our ambitions are both to increase the visibility and reach of the Chamber and to take a more active stance on various issues that concern businesses on both sides of the Danube.
Our vocation as a chamber is to defend the interests of our many members. But the second main direction in which we work is to improve the economic business environment for Bulgarian companies in Romania and for Romanian companies in Bulgaria. This happens with the support of our market research team and a lot of additional services and added value that we offer to our members.
In addition, we come up with positions on important topics that concern both the business environment and society in general. A concrete example is precisely the position we have expressed and the measures we have proposed to improve the process by which the renovation of the Friendship Bridge will be realized.
How do you assess the level of trust in the Bulgarian business in Romania and the extent to which Bulgarian and Romanian business people and companies cooperate and even create joint ventures?
I assess the level of trust as high and I would say that this is a process that has evolved over the years. 15-20 years ago, you could not say that the level of trust between the business communities on both sides was very high. But over time, with the simultaneous admission of both countries into the European Union and so on, trust between the two business communities has improved considerably. It is now at an extremely high level. Proof of this is the fact that many of the big Bulgarian companies operating on the Romanian market have a huge market share. Many of these companies are market share leaders in Romania. This shows the high level of confidence of both local businesses and the public in Bulgarian companies. I dare to say that the same is true in the opposite direction. There are many large Romanian companies operating in Bulgaria which are quite well received by Bulgarian business and society. We also have top companies operating on the Bulgarian market with Romanian capital.
So relations between the two countries have developed over the years and exclusively and only in a positive direction. At this moment, I believe that after many years of this process and after having reached the current result, the potential of the Bulgarian-Romanian relations still needs to be developed to an even greater extent.
In this context, for some time, the idea has been discussed whether the two countries could abolish border controls on their own, to do something that used to be called mini-Schengen. Now, the idea is slightly different – the abolition of land border controls between Bulgaria, Greece and Romania. Your Chamber took a stand against such an idea some time ago. Could you argue what is lost or not good about this idea? What are its weaknesses?
The answer to this question is simple and lies in two main directions. The first is absolutely operational. Under European law and European directives and regulations, something like a mini-Schengen cannot be implemented. From a purely legislative point of view, such a decision cannot be taken by the two countries, or by the three countries if Greece is included, because it would be contrary to European law. So on this issue, imperatively, it cannot happen.
The second thing that we, as a chamber, believe is that we have always fought to be full members of Schengen. Bulgaria and Romania, as two neighbouring and twinned countries, fulfill the criteria for being accepted into Schengen. In addition, we believe that we should be treated in the same way as our European partners in the EU. The creation of such a structure, which I have already said cannot be legally sustainable, would further isolate Bulgaria, Romania and Greece.
So far, the pressure from our European partners, as well as the pressure from both countries to be fully accepted into Schengen, has been quite high. If we had not been admitted to air Schengen and maritime Schengen, I do not want to comment on what would have happened. As you will remember, in the last quarter of last year, both from the Bulgarian side and from our European partners, who support the idea of us being full members, this was one of the headlines and one of the main topics that was discussed by everybody. After we were accepted as a half-member of the Schengen area, this is no longer one of the main topics for our European partners. In other words, the only thing that was done was to release tension. But there is no real result from this.
Yes, it is wonderful, we are traveling in the European Union. It is much more comfortable when we are in the Schengen area. But let’s have no illusions. Trade is along land borders. I mean, for us as a country, as a society and as citizens, it is much more important to have both countries in Schengen with their land borders.
Unfortunately, the subject of Schengen is no longer considered as topical as in the last quarter of 2023. Back then, we were fighting for full Schengen membership. We achieved a half-acceptance, which led to a release of tensions, and now our full acceptance is no longer a major issue for our European partners.
However, Hungary, which has taken over the European presidency, has said that it will bring the Schengen issue back on the table. Let’s see if this is the case.
Since the outbreak of the war in Ukraine, there has been a movement in the region to create more gas connections between the countries of Southeastern Europe. This week, for example, an agreement was signed in Sofia for a feasibility study to see if there is a need for electricity transfer lines between Bulgaria, Romania and other countries they border. In this context, how does your chamber fit into this general trend of developing energy links in our region, including between Bulgaria and Romania, but also in South-Eastern Europe in general?
As a chamber, we could not fit in, but rather express an opinion on this issue. And this is categorical. The consolidation of the energy market in Europe is something that is a positive trend, the balance between the brown economy and green energy is actually changing quite a lot in recent years. The worst change will be in 2024-2025-2026.
With this in mind, the more isolated a country is from Europe’s global energy transition, the harder it will be. Consequently, a higher degree of integration would lead to better production balancing capacities, better energy storage solutions and, of course, greater market security. In 2024-2026, the energy market will be extremely volatile, and this leads to extreme problems, especially for businesses, as households are still in a regulated market.
In other words, consolidating the market, building energy connectivity to a greater extent, including through gas pipelines and so on, would all lead to a greater scale of the system and a better balancing of that system. Currently, there is a separation of certain countries in terms of certain generation capacities, there is a lack of capacity to import or export electricity. I am not saying that there is no such connectivity. What I am saying is that capacities could be increased and new connectivity systems could be built to provide greater opportunity for the market to be regulated in a way that is in the interest of business. Therefore, we as a chamber fully welcome such initiatives and will do all we can to help implement them.
For more than two years there has been a military conflict in Ukraine, a country in our region. How does the war in Ukraine affect economic ties between Bulgaria and Romania?
In any case, a war cannot have a good effect on the economy of the belligerent countries involved, nor on the economy of neighboring countries or even countries further away. In this respect, we believe that the economies of both countries would be in a much better situation in the absence of this war. There are a lot of reasons for this – the lack of raw materials in certain industries, the disruption of the supply chains of certain commercial organizations, including manufacturing companies and so on, the demand for alternative suppliers, sometimes this demand for certain suppliers, the higher cost of the raw materials that are being bought. Of course, when we talk about economics, raw materials are the main source.
There are also a number of side effects which, at the end of the day, are reflected in the price for the final consumer. Therefore, by all means, not only from a purely life, moral, cultural and all kinds of other terms, we condemn what is happening between Ukraine and Russia, we condemn it totally. But from a purely commercial point of view, the war could also have negative consequences for neighboring countries and for the entire region.
Photo: Viktor Gugushev (source: Viktor Gugushev)
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