Greek-Bulgarian Trade

 

Vocabulary

haven	affluent	apart from
taut	ground (2)	ground to a halt
stability	expenses	social security
bleak	relocate	contribution
offset	exodus	revenue
pinch	turnover	feel the pinch
fill-up	pump	vicious circle
hardly	glance	at first glance
border	region	technicality
fee	plate (2)	license plate
at least	insurance	registration
decide	reduce	tax hike
loan

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Video

 
 

Transcript

Sophia Nikolaidou and her husband were planning to finish building their house this summer.

They both used to work in Germany and started work on their house in Sidirokastro five years ago.

But apart from some gardening, there’s not much happening right now. Builders are only taking on small jobs since there is so much uncertainty about the future.

Would they build the house again?

Mrs. Nikolaidou: “No.”
Mr. Nikolaidou: “Impossible.”

This was never an affluent area of Greece.

But after five years of economic crisis, the local economy has more or less ground to a halt.

But in neighboring Bulgaria, things are looking very different. Business is booming for the 30,000 inhabitants in the town of Petrich.

Numerous Bulgarian business consultants like Vladimir Popov are managing to attract Greek companies across the border. Bulgaria is touted as a tax-haven — and it also promises investors stability.

Vladimir Popov, Business Consultant: “The attractive thing is the tax service here in Bulgaria. I mean the low tax and the low social security expenses which we have.”

Greek company owners can save over 60% of corporate tax; and over a third in social welfare contributions.

And their factories don’t even have to relocate.

Vladimir Popov, Business Consultant: “Greek companies just move their cash-flow to Bulgaria. They don’t move any other ‘real’ business.”

In other words, the economy in Petrich is doing great — thanks to Greek letter box companies: the bleaker the outlook in Greece, the more people look to Bulgaria.

The small office is now the official address for some fifty Greek companies. And in Petrich, there are more than 2,000 registered in all.

The mass exodus has led to a continual drop in tax revenue in Greece. In order to off-set this, Athens has increased tax rates.

And that means people in Sidirokastro now have a lot less money to spend than they did five years ago.

Local business owners like Nancy Panagiotidou are feeling the pinch.

“People are still drinking coffee and wine — but instead of ordering two glasses, they only order one.”

As a result, her turnover has dropped by almost fifty percent in recent years.

The whole situation is a vicious circle: instead of paying high prices in Greece, people go shopping in nearby Bulgaria to save money.

But that means the Greek economy is hit even harder.

Nancy Panagiotidou, Restaurant Owner: “We’re twenty kilometers from Bulgaria. We can go across and so our shopping there, and that offsets our drop in turnover.”

Hardly anyone buys gasoline on the Greek side of the border — it’s just too expensive.

Things look very different on the Bulgarian side: gas here is about a third cheaper than it is in Greece because the taxes here are lower.

So most Greeks come here to fill-up.

But at first glance, there are hardly any Greek cars at the pumps.

Business consultant Vladmir Popov knows the reason why.

It’s a legal technicality.

Popov explains that thousands of Greeks who live in the border region, have Bulgarian license plates.

Vladimir Popov, Business Consultant: “The reality is that in the last five years, Greek people came. They created companies here because of the registration of their cars.”

That saves them around 70% in tax and insurance fees.

But that also means more bad news for the Greek economy.

Popov says at least in this region, there is only one way to put a stop to all this: “If they decide for some reason reduce the taxes down in Greece, maybe most of the companies will decide to restart their business down in Greece.

But it doesn’t look like that’s going to happen anytime soon.

Without further tax hikes, Greece will not get any more loans from the EU.

*     *     *     *     *     *     *

Questions

1. Sophia and her husband regret their decision to buy a house. True or false? How might they have been able to buy a home?

2. There isn’t much building and construction in their region. Is this right or wrong?

3. Does neighboring Bulgaria also have problems with its economy? What is the situation there?

4. Greek companies move their entire office and plants to Bulgaria. Yes or no?

5. What has been the response of the government in Athens? Has this been good, bad, both or it depends?

6. Can you see lots of Greek license plates in southern Bulgaria?

7. “The bleaker the outlook in Greece, the more people look to Bulgaria.” What does this mean or imply?

8. How could things change? Is that likely to happen anytime soon?
 
 
A. The Greek consumers and business people are unpatriotic; they are traitors. What do you think?

B. What could happen in the future for Greece, Bulgaria and the EU?

C. What could or should Greeks and the government do?

D. Is there a similar cross-border trade and business in your country? What happens?

E. Should there be more or less restrictions on border and international trade? What should people and governments do?

F. What will happen in the future?