Greek companies not fleeing north, says minister

Just 600 to 650 of the 4,100 companies registered in Bulgaria as being fully Greek or including Greek participation are in fact active, according to data recently released by the Bureau for Economic and Commercial Affairs of the Greek Embassy in Sofia.

In its report, which was submitted to Parliament last week by Deputy Development Minister Sokratis Xynidis, the bureau has found that ?many — possibly most — of the recently founded companies listed were based in Bulgaria for the sole purpose of a real estate or automobile purchase and not necessarily in order to transfer their production activity from Greece.?

The report submitted by Xynidis — in response to a question on the subject by Ilias Polatidis, the Popular Orthodox Rally (LAOS) deputy for Serres in northern Greece — says that according to Bulgaria?s national revenue service, the number of Greek businesses that filed a tax return last year stood at 2,072, three times higher than in 2006. According to the same report, in the first half of 2011 there were 800 new Greek businesses registered, while this number is expected to double by the end of the year.

The Bulgarian authorities believe that this increase marks a trend in investment in Bulgaria ?because of the low cost of labor, low taxation, cheaper rent and transportation, as well as the stable macroeconomic environment.?

In contrast, Xynidis argued that the only real incentives for investing in Bulgaria are low wages and insurance payments, as corporate tax in Bulgaria is just 4 percent below Greece at 20 percent. ?We cannot turn into Bulgaria nor into the Former Yugoslav Republic of Macedonia with a minimum wage of 123 euros a month and around 400 euros in the public sector,? Xynidis told Parliament, adding that Greece needs a new model for the development and support of Greek enterprises in order to stem the flow of migration to neighboring countries.

For his part, Polatidis noted that industrial migration has created unemployment of 35 percent in the northern Greece prefecture of Serres, stressing that the hardest-hit sectors are clothing and footwear.