A Stark Divide: Bulgaria Grapples with EU Funding Disparities

Bulgaria faces a critical challenge: the country’s current regional planning system is increasingly exacerbating economic imbalances, hindering the effective implementation of EU cohesion policies designed to bridge the gap between wealthier and less developed areas. This has ignited a passionate debate about how to revise the system and ensure equitable distribution of EU development funds.

Sofia: A Magnet for Resources, People, and Investment

At the heart of the issue lies the South-West planning region, home to Bulgaria’s capital, Sofia. Sofia’s economic success draws businesses and human resources from surrounding areas, leading to a lack of opportunity in the periphery. This “Siphoning” effect, critics argue, is undermining aims of regional cohesion.

Per capita GDP in the capital already transcends the EU average by 30%, while neighbouring regions struggle to reach 34% – drastically impacting their access to vital EU funding. Businesses in Sofia enjoy a 70% co-financing rate for projects, while those in the surrounding regions receive merely 30%, leaving them economically marginalized.

This lopsided development is escalating depopulation and a decline in living standards in the regions bundled with Sofia. Regional leaders warn: the “packaging” of these areas with the capital effectively chokes off investment and opportunity.

Beyond Sofia: A Nationwide Crisis

The issue extends beyond the South-West region. Bulgaria’s outdated allocation model, based on population and GDP, is not accurately reflecting the changing economic landscape.

“Wherever you look, you see the statistics are trickier than they seem. For instance, two more regions, the North-West and the North-Central, are already below the minimum population requirement for EU funding, while the North-East and the South-East are on a point of slipping under as well. The EU criteria, coupled with our existing system, is simply not working,” explains Ognyan Atanasov, the pro-active mayor of Kyustendil.

“The consequences are stark. We, in the south-west, are practically disqualified from primarily accessing the much-needed transition funds. Our businesses are facing significantly restricted rates of development aid. Even those sectors that stood tall in the past, like Varder challeged regions, are being left behind,” concludes Atanasov.

A Call for Reform: A New Zoning for a More Equitable Future

Regional leaders are spearheading the fight for change. They are calling for a long-overdue overhaul of the current zoning system, emphasizing the urgent need to implement a fairer model before the start of the 2028-2034 program period

This recalls Sofia’s dominance. While the SW region is almost reaching the peak base: per capita GDP can reach 100% compared to the EU average, resulting in a paltry 30% co-financing for businesses. Meanwhile, Sofia itself enjoys a 130% GDP relative to the EU average, further amplifying the disparity.

A proposed solution is to separate Sofia from the South-West regions, allowing them to access budget allocations independently and forging a new ‘western’ region, potentially spanning from Vidin to the southwestern Tons. This, proponents argue, would ensure a fairer distribution of funds and foster robust economic development beyond Sofia’s overwhelming presence

How does Bulgaria’s regional planning system unintentionally exacerbate economic disparities?

## A‌ Stark Divide: Bulgaria Grapples with EU Funding Disparities

**Interviewer:** ‍Joining us today is Dr. Ivan Petrov, an‍ economist⁢ specializing in regional development in Bulgaria. Dr. Petrov, thanks for being here.

**Dr. Petrov:** It’s my pleasure to be‍ here.

**Interviewer:** Your recent research highlights a ‍growing concern ⁤about Bulgaria’s ability to effectively ​utilize EU cohesion funds. Can you explain the core problem?

**Dr. ⁢Petrov:** Sure. Essentially, Bulgaria’s regional planning system is unintentionally exacerbating economic disparities.

The capital,​ Sofia, acts as a magnet for investment and skilled workers, pulling resources away from⁣ surrounding regions. This leads to a stark divide⁢ where Sofia prospers while neighboring areas struggle ​– a “siphoning” effect that undermines the very goals of EU cohesion policy.

**Interviewer:** We see this reflected in the​ example of the South-West region. Sofia’s per capita GDP already surpasses the EU average, while neighboring regions lag far behind.

**Dr. Petrov:** Precisely. ⁢This disparity in economic output directly impacts access ‍to EU funding. Sofia⁣ enjoys a much higher co-financing rate for projects, making it even more attractive to investors. Meanwhile, businesses in the surrounding areas are struggling with significantly lower funding rates, limiting their growth potential.

**Interviewer:** So, it’s not‍ just about Sofia but ⁣a nationwide issue?

**Dr. Petrov:** Absolutely. Bulgaria’s outdated allocation model, relying solely on population and GDP, fails⁤ to capture the nuances‌ of regional development. As the economic landscape evolves, this rigid system becomes less effective in channeling ⁢funds⁣ where they ‌are truly needed.

**Interviewer:** What ​solutions are being proposed?

**Dr. Petrov:** ⁤There are calls to revise the regional ​planning system ‍to ensure a more equitable distribution of EU funds. This could involve adjusting⁤ the allocation model ⁤to consider factors like regional development needs and potential rather than simply relying on population and GDP. Additionally, policies aimed at fostering‍ economic diversification in regions‌ beyond Sofia are ‌crucial for long-term sustainable growth.

**Interviewer:** It’s a complex challenge, but clearly a pressing one. Thank‍ you ​for shedding light on this issue, ⁢Dr. Petrov.

**Dr. Petrov:** My‍ pleasure.