As of June 30th, 2017 a total of BGN 8.77 billion have already been utilized.
As of June 30th 2017, the total sum of the money paid on the territory of Bulgarian municipalities under the operational programs of the EU has reached 8 769 197 329 leva, or 1230 leva per capita.
The district-level data show that the most funds have been absorbed by the largest districts – the capital (3 249 million leva), Plovdiv (663 million leva), Burgas (563 million leva), Varna (399 million leva), Stara Zagora (332 million leva). The lowest amount of EU funds has been absorbed by Pernik (55 million leva), Targovishte (75 million leva), Smolyan (84 million leva), Kyustendil (85 million leva), Vidin (94 million leva).
Compared to the population, the sum of EU money is again the larges in the capital – 2455 leva per capita, followed by Gabrovo – 2365 leva per capita and Burgas – 1364 leva per capita.
The data show that among the 265 municipalities in the country the largest amount of EU funds relative to the population has been absorbed in Rila municipality – over 6000 leva per capita. On the other end Kovatchevtsi - less than 30 leve per capita. There are ten municipalities with less than 100 leva per capita, and 13 with over 3000 leva per capita.
IMPORTANT NOTE: The data has been updated on July 11th 2017, due to a technical error in the publishing of the original table. The IME team offers its apologies.
Amounts of money paid to beneficiaries of operational programs as of June 30th 2017, BGN per capita
Such stark difference quite often has an impact on the long term development on the separate municipalities. The IME has already established that there is no statistically significant relationship between the improvement of the economic condition of municipalities and the EU funding absorbed by them. In other words, event hough most districts have been steadily moving towards the mean levels of real income in the EU, it cannot be claimed that the European funds are driving this process. In the same time the differences between the economic conditions of the separate districts are deepening. This is because the rates of improvement of their economies are very different – while some are barely growing, others (Sofia, Varna and Stara Zagora) are steaming ahead. It could be speculated that European funds are actually helping the deepening of economic differences, as the most developed regions also succeed in taking in the most funds.
The largest projects financed with EU money as of now are the subway system in Sofia, parts of highways and roads and water treatment plants in different parts of the country. In the same time thousands of projects of municipal administration are focused on the making of parks, improvement of municipal property and minor repairs of buildings and infrastructure. It is usually problematic that given the limited administrative capacity and the pursuit of short-term goals (till the next local elections) municipalities are often forced to choose whether they should apply for European projects or seek real investments. Finding investors is a long-term and hard process with unclear chances of success, but it brings real development to the local economy. It often involves municipal expenditures (infrastructure building, for instance) which do not bring much income in the municipal budget given the lack of fiscal decentralization. In the same time European projects lead directly to quick and visible to the citizens (therefore, the voters) results – a nice park, for instance – and provides opportunities for additional rewards for municipal workers.
The IME took part at an international forum in Ruse
On June 29th 2017, representatives of the Institute for Market Economics (IME) took part in a forum hosted in the city of Ruse, focused on socio-economic analysis on the status of the Danube municipalities. While the forum itself was dedicated to the Celebration of the river Danube, a great deal of ideas were discussed - mainly concerned with infrastructural, international projects, changes in regulations and initiatives as well as improving the competitiveness of the local economy.
Some of the main problems facing the local municipalities are the low level of infrastructural development, which directly influences investment activity and labor migration among different regions. As a result the main social consideration is migration, which remains high.
The primary goal of this article is to investigate the economic and social conditions of the Danube municipalties.
Economic Zones and Income
Along the Danube river three main economic centers are formed – Ruse, Kozlodui and Pleven. The average per capita income has a rather slower growth than the national average, this is particularly true for the municipalities which form economic zone “Kozlodui”. However, upon a closer investigation one would clearly see that the average wage there is higher than the average national wage in 2015 data (BGN 1,465 gross monthly wage), primarily because of the higher wages of those employed at the ‘Kozlodui’ Nuclear Power Station. Wages in Ruse (BGN 719) and the neighboring municipalities are much closer to the national average ones (BGN 878) compared to those in Pleven (BGN 666). Their growth however is falling behind the country average mostly due to the effect of the capital on the country average.
Between 2000 and 2016 the population of the Danube municipalities fell by nearly a quarter - twice faster compared to the national average. The only municipality where the negative trend is less pronounced is Ruse where the decrease is 11%. Other district centers like Vidin and Silistra have lost about a third of their population. Furthermore, in smaller municipalities like Bregovo and Nikopol the decrease is surpassing 40%. In 2016, around 60% of the Danube population was living in Ruse, Vidin and Svishtov. Aside fro the negative population growth, there are also negative migration trends. Despite this in some municipalities there are positive migration dynamics, but those are not sufficient to reverse the overall trend.
The key problem for the development of the region is the apparent lack of foreign direct investments (FDI). In the 23 municipalities along the Danube live almost 7% of the population of Bulgaria, but the amount of FDI in late 2015 was just 1,75% of the country total. Nearly 75% of all FDI are concentrated in Ruse municipality but ii is still about one third less compared to the country average EUR 3,000 per capita (accumulated at the end of 2015).
Examples of investors with growing revenue and number of employees are certainly not absent, but they are concentrated in the industry of Ruse municipality. Another important measurement of investment activity – the expenditures for obtaining long term material assets has an underlying slow but steady growth. However, in 2015, it remained 11% lower compared to 2011 results as well as below the country average.
Education and labor market
The labor market is quite fragmented. Despite three consecutive years of downward trend, unemployment remains high, peaking at 14,21% in 2016. Almost half of the Danube municipalities have reached serious unemployment levels of over 25% and in some cases, six to be precise, over 30%.
The lowest unemployment levels are in Ruse municipality (4%), while the highest one is in Dimovo municipality, which has a staggering 59% unemployed. Despite the free manpower in many of the smaller municipalities, daily labor migration remains relatively limited, which could be linked to the educational profile of the population on one hand and with the ever worsening state of the infrastructure on the other. The daily labor migration among the municipalities is estimated to be around 6% of the employed, compared to a country average of 8%.