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Greek cross-border business exodus into Bulgaria

Greek cross-border business exodus into Bulgaria
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More and more companies are fleeing Greece and setting up in Bulgaria because costs there are competitively lower. To survive the austerity-driven recession of the eurozone’s weakest member, entrepreneurs are seeking refuge in the EU’s poorest country.

Our correspondent Symela Touchtidou said: “Sandanski, Petrich, Koulata, Melnik — Bulgarian cities close to the border with Greece — are seeing an increasing number of Greeks. The first wave of companies that arrived in Bulgaria from Greece started in the 1990s, driven by the euphoria of “Greek expansion in the Balkans”. Now, completely different conditions are forcing Greek companies to seek refuge beyond the borders.”

Bulgaria’s tax on businesses and individuals is the EU’s lowest, at 10 percent. Corporate tax in Greece is 26 percent.

Employers can also offer lower minimum wages when they are in Bulgaria.

Hotel owner Christos Mavridopoulos sees more and more compatriots arriving. He told euronews: “Those who can leave do leave, new companies every day. Mostly they are desperate people. They don’t know exactly why they come here, or what their next move will be. They just want to get away from what’s happening today in Greece.”

Kostas Zervas rents a 1,000 square metre building in Petrich for 300 euros per month, as he seeks to balance the books. It would cost many times that in Greece.

Along with companies, employees move too. That would have been unthinkable 10 years ago, when Greece had ambitions of leading the Balkan region’s economies.

Mechanic David Podosian’s story is typical: “Unemployment, more or less, made me leave Ptolemaida and seek a living and work in another country. Here, I earn 700 lev (358 euros). It’s more than enough. This is a much better life than the one I would have in Ptolemaida.”

The traditionally bustling northeastern Greek city of Serres is just 40 kilometres from southern Bulgaria.

The vice-president of Serres’ Chamber of Commerce, Dimitris Giannakis, paints a bleak picture of its changing fortunes.

He said: “In the last five years, nearly 5,000 companies have been disappeared from the registry. Most have moved off to Bulgaria.”

Along with companies, Greek shoppers are crossing the border, too, for Bulgaria’s lower prices.

Serres has appealed for a special economic zone with lower taxes, to help stop the haemorrhage of businesses, but has been told European law makes that impossible.