According to the data, gathered by Wall-street.ro the answer is: taxes, spent European funds, tourism and, surprisingly, salaries
This article was published on 1 February 2019 on the Romanian economic site ”Wall-street.ro” and is republished hear with the permission of Wall-street and with small modifications.
Romania and Bulgaria have entered in the EU in the same year, but their roads have departed over time. If we often laud ourselves that our results are better than those of the neighbours, comparing ourselves with them constantly, the reality of statistics gives advantage to the country beyond Danube. In Bulgaria taxes upon salaries are lower, there is a budget surplus and more tourists. Bulgaria has overtaken Romania, but it looks like no one is interested to observe it.
Salaries and taxes upon them
Romanians have a gross minimal salary of 446 euro, which is larger than the Bulgarian one – 286 euro. However, among the EU states Romania has the highest effective rate of taxation upon a gross salary of 1000 euro – 42%. At the same time our neighbour applies a tax of only 22%, which is one of the lowest in the union, according to analysis by Deloitte. That is how out of a gross salary of 1000 euro Romanian remain with only 585 euro in their pockets, while Bulgarians take a net salary of 714 euro.
In 2018, according to Eurostat, Bulgaria had inflation rate of 2,6%, which is much below that of Romania – 4,1%, the highest in the EU.
In 2017 Bulgaria had a budget surplus of 1,1% of GDP and the public debt amounted to 25,6% of GDP, while Romania had a budget deficit of 2,9% and public debt of 35% (among the lowest in the EU).
In the period 2014-2020 Romania benefits from structural funds and investments of 36,7 billion euro, while Bulgaria receives 11,7 billion euro. In 2018 Romania and Bulgaria have a similar rate of spending of European money – around 33%.
In 2015 out of the total budget Romania had 1 billion euro to spend, but spent only 166 100 euro. In 2016 the allocated financial resources for given projects were 4,5 billion euro, while Romania spent 1,1 billion euro. In 2017, out of the allocated 14,6 billion euro, 4,3 billion euro were spent. In 2018 there were 20,8 billion euro allocated for specific projects. Romania spent only 6,9 billion euro, according to the data of the European Commission.
In 2015 Bulgaria spent 19,9 million euro out of 912 millions planned for spending. In 2016 the neighbouring country spent 754 million euro out of 3,9 billion euro planned funds. In 2017, Bulgaria spend 1,6 billion euro out of the allocated 6,6 billion euro. In 2018 the spent money is 2,6 billion euro – out of alocated 7,7 billion euro.
In 2017 Bulgaria (population of 7,1 million people) had a greater unemployment than Romania – 6,2% in comparison with 4,9%. In November 2018 the unemployment rate of Romania – a country with a population 3 times higher than the neighbouring country, had 3,9% unemployment in comparison with 6% in Bulgaria.
At this moment Bulgaria has 740 km of highways, 300 of which have been built in the last 5 years. In this and in the last year Bulgaria plans or works upon the construction of 3 highways in the northern part of the country – altogether 350 km.
In Romania at the end of 2018 the drivers could travel on 807 km of highways, after 300 km have been constructed in the last 5 years.
Even if Bulgaria has a better infrastructure from the standing point of railroad, ports, aerports and roads, both countries stay below the medium level of the EU with regard to quality of infrastructure.
In 2017 in Romania non-residents have spent 5,2 million nights, while in Bulgaria non-residents have spent 17,1 millions of nights. In Bulgaria the sea and mountain resorts are more attractive and better promoted.
In 2017 the neighbouring country hosted 8,9 millions of foreign tourists, most of which were Romanians, Turks and Greeks. Romania was visited by 2,75 million foreign tourists, most of them coming from Moldova, Bulgaria, Ungaria and Ukraine, according to the Romanian National Statistic Institute.
Schengen and euro’s adoption
Bulgaria could adopt the euro in January 2022, claimed at the the start of this year the minister of finance Vladislav Goranov. In July 2018 Bulgaria applied for entering in the Exchange Rate Mechanismm II – an obligatory period of two years before the euro’s adoption.
Recently, the prime minister of Romania Viorica Dancila announced that the government will adopt the euro in 2024 – two years after Bulgaria. In November 2018 the governor of the Romanian National Bank – Mugur Isarescu, said that Romania could enter in ERM – the waiting room for the euro, in 2024, where it should have to stay for at least two years until the adoption of the common currency.
European authorities seem to have greater trust in Bulgaria. The press in Sofia quotes the leader of the European People’s Party and candidate for the presidency of the European Commission Manfred Weber that Bulgaria would enter in Schengen in 2019, in the beginning only through airports.
In the case of Romania no such informations have appeared. At the end of December the European Parliament recommended the admission of Romania and Bulgaria in the Schengen space. In December 2019 the president of the European Commission Jean-Claude Juncker declared that Romania could enter the Schengen space before the end of his mandate in October 2019.
Corruption and democracy
As far as the corruption perception is concerned, Romania is seen as less corrupt than Bulgaria, according to an annual report, realized by the organisation Transparency International. According to the index of Transparency International for the year 2018 Romania is placed on the 61th place on national level with 47 points, while Bulgaria is placed on the 77th place with 42 points.
Romania is the member state of the EU with the lowest index of state of democracy in 2018. On global level Romania occupies the 66th place in the ranking, while Bulgaria is placed on the 46th place, according to a report by the Economist Intelligence Unit.
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