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27.12.2006

Bulgaria and Romania will benefit from EU accession

  • Upward economic trend will continue in both countries
  • UniCredit Group welcomes new EU members

Favoured by EU accession on 1 January 2007, Bulgaria and Romania will achieve stronger economic growth in the coming year. Both countries have been undergoing a far-reaching transformation process aimed at making significant progress which resulted in a success story for both countries. "UniCredit Group welcomes the new members Bulgaria and Romania in the European Union. We share the happiness of the two countries and their population at this historic moment. As largest banking group in Central and Eastern Europe, we strongly support EU enlargement," says Erich Hampel, responsible for the CEE Division within the UniCredit Group Management Committee.

Bulgaria has one of the fastest growing economies in Central and Eastern Europe (CEE). While real growth of GDP averaged 6.3 per cent in 2006, the forecast of 6.5 per cent for 2007 is even more optimistic for Bulgaria. The reasons for the strong upward trend are clear: robust expansion of domestic demand and a moderate recovery of exports will support the economy. Moreover, unemployment has fallen to below 9 per cent, the lowest level in 15 years. A tight fiscal policy and progress in privatisation have made it possible to reduce government debt to 25 per cent of GDP.

Romania will similarly continue the present upward trend: The strong economic momentum of previous years has continued in 2006, with real GDP growth expected to exceed 7 per cent, primarily driven by robust domestic demand. Moreover, thanks to fiscal discipline in recent years, the progress made in structural reforms (restructuring and privatisation of state-owned enterprises), strong economic growth and the accompanying favourable developments in budget revenue, the government has also been able to push the budget deficit well below the critical 3 per cent mark.

Dynamic banking sector
Bulgaria has one of the most dynamic banking sectors in the CEE region, efficiently channelling funds to the rapidly expanding economy. In Romania, reforms in the banking sector, the centrepiece of a market economy, have also favoured significant progress through the consolidation and privatisation of state-owned banks. "Due to the liberalisation of the banking sector in Bulgaria and Romania, both countries have a dynamic financial services sector supporting foreign investment and the strongly growing economy. The adoption of EU standards in both countries provides a high level of legal certainty and extensive investment security," says Erich Hampel.

Economic outlook
Prospects for Bulgaria are favourable, as investments in new technology and equipment gradually translate into improved competitiveness and export capacity.
The economic outlook is encouraging, adoption of the common external tariff upon EU entry in 2007 is likely to have a significant impact on foreign trade.
In Romania, the increasing inflow of foreign direct investment as well as EU subsidies will ensure sustainable development. In this regard, EU membership and financial assistance provided by the EU (some EUR 31 bn in the years 2007-2013) are expected to accelerate the reform process.

"UniCredit Group will actively support the EU integration process. We are very confident that the dynamic development of both economies will continue," says Erich Hampel.

For further information go to ceeeconomicresearch.ba-ca.com.

Enquiries:  Bank Austria Creditanstalt, International Press Relations
Silvia Stefan, tel: +43 (0)5 05 05 57126
e-mail: silvia.stefan@ba-ca.com