A m e r i c a n C h a m b e r o f C o m m e r c e i n B u l g a r i a

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Analyses:Analyses:

Raising Incomes HypedRaising Incomes Hyped

Banks Have EarnedBanks Have Earned BGN 7 7 mln in Februar yBGN 7 7 mln in Februar y

AmCham Events:AmCham Events:

Members MetMembers Met Sofia’s MayorSofia’s Mayor

Member News:Member News:

AON Studies TrendsAON Studies Trends of Work satisfactionof Work satisfaction

Edenred Marks its 10thEdenred Marks its 10th Anniversar y in BulgariaAnniversar y in Bulgaria

Property Market Is Waking UpProperty Market Is Waking Up

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It is enjoyable to see that the real estate market is perking up as our cover proclaims. Signs point in the direction that new businesses are looking for offices and people with disposable income are seeking homes. But is this revival sufficiently robust? Can more be done?

Entrepreneurs, builders and property developers have put up office complexes all around Sofia and other major cites that are in line with the latest standards. Tanya Kosseva-Boshova, executive director, European Trade Center, discusses in her interivew on Page 10 the resumed interest in offices Class A. Olga Stoichkova of Tishman International Companies informs on Page 12 that Varna, Plovdiv and Bourgas are preferred as centers of logistics. We have many new, modern, convenient office buildings with excellent communications. All that is required for them to be pulsating with life is a sustained movement of goods – regardless of whether they are manufactured in Bulgaria (I’d prefer that), imported or transit.

Commercial traffic draws in trade companies, marketing and sales offices, logistics and transportation firms, and other businesses and service structures. All these entities require offices close to storage facilities, airports, ports and train stations.

What is needed now to spur the traffic of goods? Infrastructure! What would happen to the real estate market if ports of Varna and Rousse were to be given on concession and the modernization of the railway link between these cities is completed faster? The trains between this Black Sea and Danube transportation hubs were the first ever to run in Bulgaria, starting in 1866.

Export-import commercial traffic to and from the European Union uses the ports of Rousse and Varna precisely because water provides the cheapest possible way to move cargoes. The exchange of goods can be intensified via EU’s other maritime door in our region – Thessaloniki. Even though it is much closer to Sofia than Varna, no highway exists that connects the Bulgarian capital with that port, and the railway is chronically under renova-tions.

With proper infrastructure, a serious portion of the commercial traffic between EU and countries in Asia and Africa could pass through Bulgaria. The needed personnel can be accommodated in all these excellent new Class A offices.

How about that?

Sincerely,

Milen MarchevEditor-in-Chief

Dear Reader,

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Publisher American Chamber of Commerce in BulgariaBusiness Park Sofia, Mladost 4 AreaBuilding 2, Floor 6, Sofia 1766, BulgariaTel.: +359 (2) 9742 743Fax: +359 (2) 9742 741e-mail: amcham@amcham.bgwww.amcham.bg

Editor-in-ChiefMilen Marchev

Deputy Editor-in-ChiefChristopher Karadjov

Senior Editor:Irina Bacheva

ISSN 1312-935X

Writers:Boyko Vassilev, Marina Tzvetkova, Mina Georgieva, Panayot Angarev, Yuliana Boncheva

AdvertisingAmCham Bulgaria: Nadejda Vakareeva, nadia@amcham.bg

AmCham Bulgaria Magazine:Milen Marchev, milen@milenmarchev.com

The AmCham Bulgaria Magazine reaches a broad audi-ence of AmCham members, leading US, Bulgarian and international companies, US and Bulgarian decision-mak-ers, all AmChams around the world.Subscription is free of charge. If you would like to sub-scribe to AmCham Bulgaria publications, please contact the AmCham Bulgaria office.

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AmCham Bulgaria Magazine is a primary forum for political and economic analyses, news, viewpoints as well as for the presentation of new business opportunities. The articles in the AmCham Bulgaria Magazine express the opinions of the authors and do not necessarily reflect the position of the American Chamber of Commerce in Bulgaria.

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Contentsc o v e r s t o r y

Property Market Is Waking Up . . . . . . . . . . . . . . . 4

By Marina Tsvetkova

i n t e r v i e w

Shopping Malls and Office Buildings to Dominate the Deals This Year, Says Tanya Kosseva-Boshova, Executive Director, European Trade Center . . . . . . . . . . . . . . . . . . . .10

By Irina Bacheva

Sofia is Preferred Office Location, Plovdiv and Varna - Good for Production and Logistics, Says Olga Stoichkova, Commercial Manager for Tishman International Companies . . . . . . . . . . . . .12

Employees require a lot more than sufficient technical equipment Says Nikola Ignatoff, Property Manager . . . . . . . . . . . . . . . . . . . . . . .13

Bulgaria’s Growth Rate and Efficient Allocation of Capital are Vital for Real Estate Business, Says Michaela Lashova, CEO, Forton. . . . . . . . . . .14

New Housing Declines . . . . . . . . . . . . . . . . . . . .15By Miglena Ivanova, Investor.bg

a n a l y s i s

Raising Incomes Hyped, Maligned. . . . . . . . . . . . .16

By Marina Tsvetkova

Banks Have Earned BGN 77 mln in February . . . . . . . . . . . . . . . . . . .20By Svilen Kolev, Peter Neykov

a m c h a m e v e n t s

Sofia’s Mayor Announces New Projects . . . . . . . . .22

m e m b e r n e w s

Edenred Marks its 10th Anniversary in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

Safety at Work – a Growing Priority of a Sustainable Business . . . . . . . . . . . . . . . . . .25

43% of Employees Versus 63% of Top Managers Consider Themselves Recognized in the Company . . . . . . . . . . . . . . . .26

n e w m e m b e r s . . . . . . . . . . . . . . . . . . . . .26

AmwayHelios Power

s p o r t s

U.S. National Soccer Team for World Cup 2014 comes from… Germany and California . . . . . . . . . .28

By Tony Manfred/Business Insider

3M Bulgaria EOOD . AA KRES EOOD . Abbott Products EOOD . AbbVie EOOD . Actavis Bulgaria . Adecco Bulgaria ltd. . Advance International Transport EOOD . AES Corporation . AFA OOD . AGORA-IN Ltd. . AHNtech Branch Bulgaria . AIG Europe Limited (Bulgaria Branch) . AIMS Human Capital . Air Berlin PLC & Co. Luftverkehrs KG . Albena AD . Alfred C. Toepfer International Bulgaria EOOD . ALICO Bulgaria ZhZD EAD, a MetLife Inc. Company . All Channels Communication . Alliance One Tobacco Bulgaria . Allied Pickfords Bulgaria . Alpha Bank Bulgaria . America for Bulgaria Foundation . American College of Sofia . American English Academy . American Research Center in Sofia . American University in Bulgaria (AUBG) . Amgen Bulgaria EOOD . Amway Romania Marketing Srl . Anglo-American School of Sofia . AON Bulgaria . APOLO Ltd. . Arexim Engineering . Ashtrom International Ltd. . Association Srednogorie Copper Industrial Cluster . Astra Zeneca Bulgaria EOOD . AT Engineering 2000 Ltd. . Atlantic Club Bulgaria . Atos IT Solutions and Services EOOD . Attica Media Bulgaria Ltd. . August Research . Aurubis Bulgaria AD . Auto Bavaria Ltd. . AVON Cosmetics Bulgaria . Axway Bulgaria EOOD . Baker Tilly Bulgaria . Balkan Star Automotive EOOD . Ballistic Cell Ltd. . Baxter Bulgaria EOOD . BC Serdon . Berlitz Schools of Languages . BG Radio . BICA International Ltd. . BMG Ltd. . BMW Vertiebs GmbH - Branch Bulgaria . BNP Paribas S.A. - Sofia Branch . BOYANOV & Co. . Braykov's Legal Office . British American Tobacco Bulgaria . Brown Forman Beverages Worldwide Sofia Branch LLC . bTV Media Group . Bulgarian American Enterprise Fund . Bulgarian Charities Aid Foundation (BCAF) . Bulgarian Executive Search Association . Bulgarian Property Developments EOOD . BulPros Consulting JSC . Bulstrad Life Vienna Insurance Group . Business Intellect Ltd. . Business Park Sofia EOOD . Carat Bulgaria . Castello Precast OOD . Center for the Study of Democracy . Cheque Dejeuner Bulgaria Ltd. . Chevron Bulgaria Exploration and Production EOOD . Cisco Systems Bulgaria . Citibank Europe Plc, Bulgaria Branch . Club 50 Plus . CMS Cameron McKenna LLP - Bulgaria Branch . Coca-Cola Enterprises Services Bulgaria EOOD . Coca-Cola HBC Bulgaria AD . Coface Bulgaria Credit Management Services EOOD . COLLIERS International Bulgaria . Congress Engineering Ltd. . Construction Management Group . Contitrans M Ltd. . ContourGlobal Maritsa East 3 AD . Credit Agricole Bulgaria EAD . Curtis / Balkan Ltd. . Dalkia Bulgaria EAD . Danailov, Mihaleva, Nedelchev & Co. . Delchev & Partners Law Firm . Deloitte Bulgaria EOOD . denkstatt Bulgaria OOD . Deutsche Bank AG . Devin AD . DHL Express Bulgaria Ltd. . Diamed Ltd. . Dimitrov, Petrov & Co. . Djingov, Gouginski, Kyutchukov, & Velichkov . Dobrev & Lyutskanov Law Firm . Dr. I.S. Greenberg Medical Center . Drujba Glassworks SA . Dundee Precious Metals Inc. . DuPont Pioneer . EcoPack Bulgaria AD . Edenred Bulgaria . Ekoterm Proekt EAD . Ekotoi - Service Ltd. . Ekzotika EOOD . Electron Progress EAD . Elevat Ltd. Legal House . Eli Lilly and Company . Eltrak Bulgaria Ltd. . EMC Computer Systems Austria GmbH . Emerson Process Management . EnergoService AD . Engineeringservice Sofia Ltd. . Enterprise Communications Group OOD . EOS Matrix Ltd. . Ernst & Young Bulgaria EOOD . ESRI Bulgaria Ltd. . Etap Adress . Eurobank Bulgaria . Eurohold Bulgaria . European Bank for Reconstruction and Development (EBRD) . European Trade Center EOOD . Expat Capital . Experian Bulgaria EAD . FairPlay International . Fama Consulting OOD . Flying Cargo Bulgaria Ltd. - Licensee of FedEx . Force Delta Ltd. . Forton International AD . Foundation Glob@l Libraries - Bulgaria . Fox International Channels Bulgaria EOOD . GAEA - Green Alternative Energy Assets EAD . Galardo EOOD . Gasstroymontaj Jsc . General Electric International . Georgiev, Todorov & Co. . Geostroy AD . Geotechmin OOD . Geotrading AD . Gi Group . GIFTA . GlaxoSmithKline . Grand Hotel Sofia . GTC Bulgaria . Helios . Power Hewlett-Packard Bulgaria Ltd. . HILD Asset Bulgaria Jsc. . Hilton Sofia . Honeywell EOOD . IBM Bulgaria . ICAP Bulgaria JSC . Ideal Standard - Vidima AD . Incotex Group Ltd. . Industrial Holding Bulgaria . InterConsult Bulgaria Ltd. . Interdean Relocation Services . Interlang Ltd. . Intertek - Moody . Intracom Bulgaria EAD . Investbank JSC . Investor BG AD . IP Consulting Ltd. . ITT Exelis . Japan Tobacco International Bulgaria . Jobs.bg EOOD . JobTiger Ltd. . Johnson & Johnson Bulgaria EOOD . Johnson Controls Electronics Bulgaria . Junior Achievement Bulgaria . Kaliakra AD . Kamenitza AD . Katilin Popov Enforcement Officers . Kempinski Hotel Grand Arena Bansko . Kempinski Hotel Zografski Sofia . KPMG Bulgaria OOD . LANDMARK Property Management AD . Lexim Sofia Ltd . Lindner Immobilien Management EOOD . Lirex BG Ltd. . M3 Communications Group, Inc. A Hill & Knowlton Associate . Maria Vranovska, MD, MBA . Mars Incorporated Bulgaria EOOD . Marsh EOOD . Maxi I AD . MB Communications . MBL| Part of the CBRE Affiliate Network . Megatron EAD . Mellon Bulgaria EAD . Merck Sharp & Dohme Bulgaria . Microsoft Bulgaria . Miltech Ltd. . Minstroy Holding Jsc . Mobiltel EAD . Monbat Plc. . Mondelez Bulgaria AD . Moten Sport . Moto-Pfohe Ltd. . Movex Relocations . Mr. Alex Nestor . Mr. David Hampson . Mr. Jean Talmon . Ms. Anelia Tatarova . Ms. Kalinka Kovatcheva . Ms. Margarita Radeva, CPA . Municipal Bank Plc . Musala Soft AD . Nemetschek Bulgaria . NEXTDOOR Ltd. . Novacon Bulgaria Ltd. . Novotel Sofia MHQ . Nu Boyana Film Studios . Office for Mining Industry and Metallurgy Ltd. . On Bulgaria Ltd. . Oracle East Central Europe Limited - Branch Bulgaria . Orak Group Europe Ltd. . Orbit Ltd. . Orkikem Ltd. . Panchim Ltd. . PANDA - IP Ltd. . Pedersen & Partners . Penev LLP . Penkov, Markov & Partners . Pfizer Luxembourg SARL Branch Bulgaria . Philip Morris Bulgaria EOOD . Philips Bulgaria Ltd. . PMB EOOD . PPD Bulgaria EOOD . Premier Luxury Mountain Resort . Premier Tours Ltd. . Prestige 96 AD . Progress CAD R&D Centre Ltd. . Provident Financial Bulgaria Ltd. . PSG Payroll Services Ltd. . PwC Bulgaria . Quadrant Beverages JSC . Radisson Blu Grand Hotel . Red Devil Catering Plc . Regus Bulgaria Ltd. . Renault Nissan Bulgaria SRL . Right Rental Ltd. . RSM BX Ltd. . S&T Bulgaria . Sanofi - Aventis Bulgaria EOOD . Sb Accounting and Consulting . Schenker EOOD . Schneider Electric Bulgaria . SECTRON . Sensata Technologies . Shell Bulgaria EAD . Sherita M Ltd. . Siemens EOOD . SIENIT Holding . Sitel Bulgaria EOOD . Sodexo Pass Bulgaria EOOD . Sofia Hotel Balkan . Sogelife Bulgaria IJSC . Sopharma AD . Sopharma Trading JSC . St. Sofia Golf Club & SPA . Stanton Chase International Bulgaria . Steelcase International . Stefan Dimitrov, Norman Realestate Co. Ltd. . Sunfoods Bulgaria EOOD - Development Licensee of McDonald’s in Bulgaria . Sutherland Global Services Bulgaria EOOD . Tavex EOOD . TBI Bank EAD . TechnoLogica EAD . Telelink EAD . TELUS International Europe . The Coca-Cola Company Bulgaria . Tishman Management Company EOOD . Titan Zlatna Panega Cement . TMF Services EOOD . Tocheva & Mandazhieva Law Office . Totema Engineering JSC . UniCredit Bulbank . UniCredit Leasing EAD . Unimasters Logistics Plc . Unique Estates . Unisys Bulgaria Branch . United Bulgarian Bank . VAPTECH Ltd. . Videolux Holding / Technopolis . VISA Europe . VIVACOM . VMware Bulgaria EOOD . VSK Kentavar - IZ Dinamika EOOD . VUZF University Higher School of Insurance and Finance . Walltopia Ltd. . Welcome to Bulgaria . Westinghouse Energy Systems Bulgaria Branch . World Courier Bulgaria Ltd. . World Transport Overseas Bulgaria Ltd. . WorleyParsons Nuclear Services JSC . Wrigley Bulgaria EOOD . Xerox Bulgaria Ltd. . Yastrebets Hotel Wellness & SPA . Zlatina Ruseva-Savova, LL.M., MBA . Zobele Bulgaria EOOD

Board of Directors of the American Chamber of Commerce in Bulgaria

President Mr. Peter Lithgow AES Corporation

Vice President Mr. Alex Nestor Individual Member

Vice President Mr. Daniel Berg European Bank for Reconstruction and Development (EBRD)

Treasurer Ms. Petya Dimitrova Eurobank Bulgaria

Members Mr. Borislav Dimitrov Cisco Systems Bulgaria

Mr. David Butts CMS Cameron McKenna EOOD

Ms. Diana Pazaitova Fama Consulting

Mr. George Brashnarov Nemetscheck Bulgaria

Ms. Krassimira Chemishanska Amgen Bulgaria

Mr. Sergey Koynov Forton International

Mr. Solomon Passy Atlantic Club Bulgaria

Mr. Venislav Yotov AIG Europe Limited (Bulgaria Branch)

Ex-Officio Member Mr. Thomas Bruns Senior Commercial Officer, U.S. Embassy

Executive Director Mr. Valentin Georgiev

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In theory, prices of goods and services are something like road signs that show what is happening in the economy. The Bulgarian residential market seems to have started following that theory, while the rapid ups and downs in real estate prices are now in the past.

In the early 1990s the prices of real estate in the country started rising, gained speed in 2006 and collapsed in 2009. Statistics showed that the num-ber of agencies reached an impressive 6,000 during the peak, while a few years before there were just 1,000 agencies active. As the market literally froze in 2009 and 2010 and deals reached their pre-boom levels, the number of both companies and brokers

plummeted.

Thus 2013 marked something like an anniversary: five years since the begin-ning of the crisis and the end of a full five-year boom cycle, followed by five years of falling prices and

the beginning of a new stage of development of the property market

in Bulgaria, the industry says. The forecasts now are increasingly opti-mistic: the market of mortgage resi-dential loans is reviving and data sug-gest sensible growth in 2014, the Institute of Market (IME) Economics says. On the micro level, the economic

growth of 0.9 percent in 2013 was beyond expectations. IME forecasts further strengthening of the economic growth, in line with the more optimistic expectations for the EU as a whole. On the other hand, investment in the Bulgarian economy grew in the fourth quarter of 2013 for the first time since the beginning of the year. The strength-ened investment activity could be interpreted as a sign of restored invest-ment confidence.

The better performance of the economy in 2013 and the higher incomes of bor-rowers resulted in a rise in demand for bigger mortgage loans, Postbank data show. While the share of loans worth up to 20,000 Euro declined from 44.8

Proper t y Market Is Waking UpAnalysts and brokers project an increase in real estate transactions and cheaper mortgage loans. Experts say interest rates will fall by up to 0.5 percent. Market revival is expected to continue throughout 2014

By Marina Tsvetkova

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percent in 2012 to 40 percent in 2013, loans in the range of 20,000 to 80,000 Euro increased 0.9 percent to 2.3 per-cent. It can be presumed that the big-gest “winners” from the improved eco-nomic performance were the people with higher education, which allowed them to keep their jobs and/or increase their incomes.

Although the average residential prices in the country continued decreasing in 2013 on an annual basis, the pace was twice slower than the year before. There was a positive change too: a rise in the average prices in some of the larger cities and especially in Sofia, where a slight increase in residential prices was registered in three consecu-tive quarters of 2013. That shows high-er interest in the purchase of residential estate and an even bigger potential for mortgage loan growth in the coming months.

The data show that

the real estate market grew 53 percent in 2013,

year on year, which is a clear sign of coming stabilization. On the whole, Bulgarians bought mainly two-bedroom apartments. Such apartments cost around 45,800 Euro in the capital city and between 42,000 Euro and 49,000 Euro in the coastal cities of Varna and Burgas. In 2014, the interest rates on mortgage loans are expected to fall, which will further encourage property deals in the bigger cities of the coun-try.

Another encouraging trend on the real estate and mortgage loan market is the increase in new construction and the number of residential property per-mits. That is a sign of starting recovery in residential construction, as it is the fist time since the beginning of the crisis that there has been such an increase.

In the beginning of 2013, the tenants of residential estate in the capital city were also more active. Demand was concentrated mainly in the center of the city, the southern regions and Mladost residential district. The average rent ranged between 150 and 250 Euro a month; the main motive for closing deals was the availability of a repaired

Eurostat: Bulgarians among biggest homeowners in EU More than half of the people in the EU member states have their own homes, a Eurostat analysis of the type and status of homes in the EU in 2011 shows. The larg-est share of homeowners who are not burdened with a mortgage exists in Romania (97 percent) and Bulgaria (95 percent). The two countries also have the smallest share of people who rent a home: between 2 and 3 percent.

The share of people who rent a home is the largest in Switzerland (about 56 percent) and it is well above the share of homeowners.

Other countries where renting a home is popular are Germany (about 30 percent), Denmark, the Netherlands and Sweden (about 25 percent).

About 66 percent of the people in Sweden live in homes with a mortgage or loan. The situation is similar in Norway and Iceland (around 63 percent), the Netherlands (605), Denmark (52 percent) etc. Sweden, Switzerland, Norway and the Netherlands are the EU countries with the smallest share of people living in their own homes without a mortgage or loan: between 5 and 10 percent.

Around 40 percent of the people in the EU live in apartments, a little more than a third (35 percent) in detached houses and 25 percent, in semi-detached houses, the European statistics show.

The share of people occupying apartments is the biggest in Spain, Latvia and Estonia: about 65 percent. The share in Bulgaria is 47 percent with Bulgarians own-ing more than 2.5 million homes in the cities and nearly 1.3 million homes in the vil-lages.

The biggest share of people occupying detached houses is in Croatia (71 percent), Slovenia (66 percent), Hungary (64 percent), Romania and Denmark (about 60 per-cent).

Although Bulgaria and Romania have the highest rate of home ownership, people in the two countries cannot boast high-quality living conditions in terms of number of rooms and residents. Dwelling overcrowding is the highest in Romanian (54 percent), Bulgaria, Poland and Hungary (47 percent).

The lowest levels of dwelling overcrowding are observed in the Netherlands (1.7 percent) and Belgium (2.2 percent), while the EU average indicator is 17 percent.

According to another housing quality indicator – availability of basic sanitary condi-tions – some 38 percent of Romanians and 25 percent of Bulgarians do not have indoor flushing toilets, compared with an average of 3 percent in the EU. In addition, 36 percent of Romanians and 15 percent of Bulgarians have no bath or shower in their home. In Spain, the Netherlands, Sweden and the United Kingdom such hous-ing problems are practically zero.

Crime, violence or vandalism in the local area is perceived as a problem by an aver-age of 14 percent of Europeans. The indicator is 27 percent in Bulgaria, 20 percent in the United Kingdom and Greece, 18 percent in the Netherlands, 16 percent in Romania. The highest risk of losing one’s dwelling because of poverty is seen in Romania (53 percent of the population), Hungary (40 percent), Bulgaria and Latvia (35 percent). The risk of losing one’s home because of poverty is virtually non-exis-tent in Switzerland, the Netherlands, Norway, Ireland and Iceland, Eurostat reports.

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bathroom and kitchen.

The rental market can get a manifold boost if tenants decide to make minor improvements in the offered apart-ments, brokers say.

Bulgarians are the most crammed for room as compared with the other Europeans,surveys show. The residential area per person in the country is the smallest on the Old Continent: about 15 sq. m. By comparison, people in Hungary live on 20 sq. m, and in Germany, on 41 sq. m. In Bulgaria, there are more than 50,000 homes with four or more people living in.

70 percent of homes are occupied by a single family.

According to different assessments, a person needs about 30 sq. m of area to live comfortably. The recent trend in resi-dential purchases is for more spacious homes. Developers are also following an entirely different policy from that before the boom, which was followed by the crisis. The quality criteria are now higher and the time of small box-resembling homes is over. The apartments designed now are some 30 percent larger and many of them have higher ceiling. People in the industry say that

rough construction is in demand again

on the residential property market.

More than 10 percent of the transac-tions in the first quarter of 2014 were closed before the building obtained the so-called Certificate No 14 (rough

construction). Half of the apartments in the highest-quality buildings were sold before that stage. There was also a rise in the inquiries for financing for

The price of agricultural land in Bulgaria will continue to rise, despite the drop in the number of deals that was reported in 2013. This is the conclusion in the analysis of the land market in 2013 published by the Ministry of Agriculture. According to the authors of the analy-sis, the agricultural land market in Bulgaria remains among the most attractive and dynamic ones. That is due to the implementation of the Common Agricultural Policy of the EU and the constantly rising size of subsidies. Agricultural producers have been the most active market players for the past three years. By acquiring property they solve many of the issues related to the renting of land and the par-ticipation in subsidy schemes under the European funds. Surveys conducted by the System for Agricultural Market Information (SAPI) since 1998 show a dynamic increase in the number of deals, as well as in the market prices and rental payments.

In 2007-2009 a total of 360,000 hectares of fields were sold in nearly 374,000 deals. The average market price at the end of the period reached 3,000 Leva per hectare. A total of 494,000 trans-actions for 515,000 hectares were conducted in 2010-2013. The average price reached 3,820 Leva per hectare, which was an increase by 27 percent compared to the preceding period.

On the whole, the agricultural land market was extremely active in 2010-13 with prices going up. At the beginning of the period the average market price in the country was 3,210 leva per hect-are, while 2013 saw an increase by 34 percent. There remained a considerable difference in land prices by region. Rental agree-ments were relatively stable. The level of rental payments increased but not as much as the prices of deals.

Agricultural land market

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homes in construction. In most cases that happened at the stage of Certificate 15 (suitable for occupa-tion). Banks provided smaller financ-ing for buildings at an earlier stage, for instance Certificate 14, so clients pre-ferred to wait until they got Certificate 15 or Certificate 16 (right to use). According to brokers buyers are well informed about the risk they take when buying an apartment under construc-tion. They are interested in safe proj-ects of proven developers.

One of the main groups of buyers of apartments under construction is fami-lies who already have a home but want more living space. Another group is parents buying apartments for their children. They expect to have an apart-ment ready for moving in after a few years, when their child will seek inde-pendence. They find the solution to their problems in the new buildings that differ from those built in 2006-2008. The most active buyers remain the people 25 to 45 years-of-age who are looking for a first home – usually simpler apartments worth 40- 50,000 Euro. Their expectations are for little cheaper mortgage loans – with inter-est starting from 5.9 to around 6.5 or 6.75 percent.

Residential prices remained unchanged

in the first quarter of 2014. The aver-age price in Sofia was about 660 Euro per sq. m, similar levels were regis-tered in Varna. The levels in Plovdiv were about 500 Euro and in Burgas,

around 480 Euro per sq. m of residen-tial area. During the period there was a rise in prices in certain more pre-ferred districts. Inquiries in the capital city are made mainly for the residential

districts of Lyulin, Nadezhda, Mladost, Ovcha Kupel, Borovo, Druzhba, Krasna Polyana, Lozenets, Svoboda and Strelbishte. Calculations of Bulgarian Properties on the basis of

In 2013 there were 117,727 deals for 116,529 hectares. As com-pared with 2012, the number of deals dropped 20 percent. The average market price in the country was 4,290 Leva per hectare, or 4.6 percent more than in 2012.

The biggest number of deals for the period were closed in the North-Western Region of the country: 31,267 deals for 33,149 hectares. The average market prices in the region was 3,800 leva per hectare.

A total of 131,552 rental contracts for nearly 290,000 hectares of agricultural land were closed in 2013. In comparison with 2012, the number of deals decreased 15 percent and rentals fell 10 percent. There were 15,084 leaseholders in 2013. The average

size of the leased land was 2.2 hectares per owner and 19.4 hectares per leaseholder. The predominant rent was of the mixed type and varied in a wide range. The average rate was 250 to 300 leva per hectare. The leading payment indicator for in-kind rents is the average wheat harvest: from 10 to 25 percent of the harvest. Many of the rental contracts specify a fixed amount of grain to be given as payment: from 300 to 800 kilos per hect-are.

The year 2013 saw an increase in the deals intended to change the use of land. A total of 5,412 deals were closed in 2013 or 9 percent more than in 2012. The land sold in those deals was 4,957 hectares, up 3 percent year on year. The average market price was 16,330 leva per hectare in 2013.

attractive and dynamic

Broker profession gradually gaining popularity in Bulgarian education systemBrokerage is a lucrative business but there is no education qualification for that. Everybody can try their power and skills and all they have to do is register a com-pany. During the years of the property boom the unofficial number of brokers was nearly 10,000 and now it is between 3,000 and 4,000.

The broker profession is gradually gaining popularity in the Bulgarian education sys-tem: starting from high school, to higher schools (four universities) and to vocational training centers (more than 10).

High schools started teaching brokerage after in 2009 the sectoral ministry started developing state educational standards, which were published in 2012 in their final form as an ordinance. There are currently nine schools in the country that teach brokerage: in Sofia, Varna, Plovdiv, Kardzhali, Montana, Blagoevgrad, Dobrich, Veliko Tarnovo and Pleven. A total of 1,157 future professionals are trained in 49 classes, data of the Ministry of Education show. The initiative is most often taken by the vocational schools on construction, architecture and geodesy.

Four universities in Bulgaria prepare staff for the real estate sector. Economic University in Varna introduced Real Estate Economics in 2005; the same specialty was opened in University of National and World Economy in Sofia in 2007. University of Architecture, Construction and Geodesy launched a bachelor’s program on Planning and Management of Land and Property in 2006. A few years ago St Kliment Ohridski University of Sofia started a master’s program on Facility Management (a complex of building management processes). Interest in the specialty is strong with 110 students having been admitted for the last two years. The employment potential is quite good: from property agents and credit consultants, to public administration experts and appraisers.

The vocational training centers are the third group of organizations preparing staff. There already more than 10 licensed schools that have right to train brokers. The structures have a national association, as well as agencies such as Address, Mirela and Toniko. They organize courses that are followed by exams and the candidates who pass them receive certificates.

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national statistical data show that the average prices of apartments in the regional cities in the first quarter of 2014 increased a real 1.79 percent (after inflation), year on year.

Nevertheless,

property prices in Sofia are the lowest as compared with other countries in Europe. Even the capitals of neighboring countries – Belgrade, Skopje and Bucharest – have higher prices. While standard apartments in Vienna start from 2,500 Euro per sq. m, in Sofia they start from 750 Euro. There are also top offers: the most expensive house in Bulgaria that is currently up for sale is asking for 4 million Euro.

The Russians remain prime buyers of property in Bulgaria. They dominate the market along the Black Sea coast, making 95 percent of the purchases there. Interest in buying second homes has been recently shown by people from Ukraine, Belarus and Kazakhstan. Around 20 percent of foreign buyers belong to the group of “others”. They include citizens of many European countries: France, Germany, the Netherlands, Belgium, as well as more exotic and distant destinations such as the United States and Canada. None of these nations, however, shows as steady presence as the Russians for whom this is a trend. Those 20 percent,

however, prove that the Bulgarian mar-ket is steadily positioned internationally as a destination for second-home pur-chases. There is interest in village houses and apartments in the ski resorts and the coastal holiday villages. The forecasts for the vacation property market are for a successful year 2014,

with the rise in activity expected to reach 5 or 10 percent. A crucial factor for Bulgaria will be the sanctions that the EU may impose, because the cli-ents come mainly from Russia and the property market depends on their pos-sibility to travel and freely buy homes in this country.

Tax authorities scrutinize real estate deals The commission fees of brokers from every second deal are not reported to the state. In this way the large broker agencies hide incomes and save on the taxes due, cal-culations of the tax authorities show. In 2013 alone the National Revenue Agency (NRA) conducted more than 100 check-ups and audits of real estate agencies and individual brokers believed to be at risk of tax evasion.

The mass inspections were prompted by hundreds of complaints by clients of real estate agencies who had not been given a receipt or any other document for the commission fees they had paid. In 80 percent of the cases the inspections confirmed the taxation breaches.

There were even cases when the fee reached 2,500 Euro but the property buyer and the agency did not have a contract signed, nor a document was issued for the paid sum. The penalty for legal persons who fail to issue a receipt is 2,000 but it can reach up to 10,000 if the company does not have a cash register or if the cash register is not connected to NRA’s system, the revenue administration reminds.

During the inspections the tax authorities established that deals were regularly reported at a much lower price. In principle brokers advised their clients to certify the sale at the notary’s office at a price slightly above the tax appraisal of the property. In this way buyers and sellers saved on the fees and taxes due to the notary and the municipality. At the same time brokers also reported a commission fee on the lower amount.

Nearly 700 million leva turnover has been hidden by the sector for the last five years, a NRA analysis shows.

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- Do you see signs of recovery in the residential real estate and construction market in Bulgaria?

- There are clear signs that the residential real estate market and the construction in general are slowly recovering. The degree of recovery varies across the different cities in the country and across several segments. Whereas in Sofia and Bourgas there is significant surge in the development of new projects, other cities see modest signs of or no recovery at all. A good manifestation of the recovery is the development of the largest residential project in the country to date in the district of Mladost in Sofia by an international construction company and developer which opened its office in Sofia recently. In addition, brokerage companies have reported an increase both in the number of transactions and the rates at which they are con-cluded.

- What would be the most wanted and popular deals in 2014?

- The first investment deals that we will likely see to unfold will be for shopping malls and large-scale office buildings as they have some good track record and high occupancy levels; the time has come for the ‘secondary’ market to materialize.

In addition, when it comes for speculative development – investors will likely focus predominantly on offices and indus-trial projects as demand is gradually starting to outweigh sup-ply.

- Can you name some of your recent successful proj-ects?

- European Trade Center comprising of five Class A office buildings is a very successful project enjoying strong interna-tional tenants and occupancy levels exceeding 95 percent.

- Which towns/regions in Bulgaria are most preferred for new projects?

- Sofia and Bourgas are the cities which currently enjoy the greatest number of new developments either in the planning stage or already in construction. Recovery in the other big cit-ies will probably follow but with some lagging and not with the same intensity.

- What are the regulatory issues that in some way hamper your business?

- There is definitely room for improvement in the field of online

services related to the construction process documentation, filing inquiries, procuring cadastral sketches, etc. Moreover, an issue which many of the developers and the Association of Commercial Buildings Owners, established recently, have been quite vocal about is the inability to reclaim VAT on invest-ments in state or municipal infrastructure such as local roads which developers are forced to make in order to add value to their projects.

- What is your vision and strategy for the development of Sofia: a cultural capital, green city, city of growth, smart city?

- As a capital, Sofia is an economic power that drives the stan-dard of living in a country where many cities have poor eco-nomic performance indicators. It is therefore of paramount importance that the strategy of the development of the city is predominantly focused on growth and further economic devel-opment, especially in the services sector and preferably in the high-value-added industries.

Shopping Malls and Office Buildings to Dominate the Deals This YearSays Tanya Kosseva-Boshova, Executive Director, European Trade Center

By Irina Bacheva

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- Do you see a recovery in the residential real estate and construction market in Bulgaria?

- We see a slow recovery, driven mainly by second-home for-eign buyers and young-family first-home buyers. The prices have been stable over the last two years and are not expected to grow significantly in the short term.

- What would be the most wanted and popular deals in 2014?

- In general, the market as we see it now is more mature and the good deals will be those fulfilling the requirements of both parties.

- Can you name some of your recent successful proj-ects?

- Of course, we can say that our office building A2 is perform-ing successfully on the office real estate market. Our develop-ment Sofia Airport Center has received several prestigious international and local awards, as well as LEED® Gold certifi-cate as a recognition for its sustainability and unique environ-ment. All that is appreciated by our tenants and we expect to start new buildings shortly.

- Which towns/regions in Bulgaria are most preferred for new projects?

- It depends on the specific real estate. For offices and residen-tial buildings Sofia definitely remains a preferred location. Forproduction and logistics - Plovdiv, Varna, Bourgas are among the options for investors. There is a good potential for office developments in the university cities.

- What are the regulatory issues that in some way hamper your business?

- They are quite a few, but we can name some like VAT on

infrastructure or the way the waste collection tax is calculated. We believe that all such problems can be overcome with dia-logue and reasonable efforts from the interested parties.

- What is your vision and strategy for the development of Sofia: a cultural capital, green city, city of growth, smart city?

- My preference is for a smart and green city and we all should develop projects in this direction.

Sofia is Preferred Office Location, Plovdiv and Varna - Good for Production and LogisticsSays Olga Stoichkova, Commercial Manager for Tishman International Companies

Three Tishman International Companies property managers received their certificates from the World President of the Institute of Real Estate Management (IREM) Joseph Greenblatt at a ceremony held last month at Crystal Palace Hotel, Sofia. During the event, he congratu-lated the first 10 Bulgarian property

managers, who successfully complet-ed the specialized training required to qualify for this recognition.

Nikola Ignatoff, Malinka Marinkina and Olga Stoichkova were officially award-ed the Certified Property Manager® (CPM®) certification, as a result of successfully completing the rigorous

training, which covered several mod-ules within a two-year period. During his visit to Bulgaria, Greenblatt visited Sofia Airport Center (SAC), one of the most sustainable and modern business parks in the country. His tour provided him with the opportunity to see first-hand the high professional standards used by SAC property managers.

Three professionals from Tishman are Certified Property Managers®

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-You are one of the managers who have been awarded the prestigious CPM® title. How do you feel about receiving this recognition?

- Alan D. Levy, chairman of Tishman International Companies, has held the prestigious certification for nearly 50 years. As a result, most of our compa-ny procedures and methods are already in accordance with the best practices. Of course, we have expand-ed our knowledge about the managing process of real estate properties dur-ing this course. We are very proud of this achievement and I believe that this will be beneficial for all our existing and future tenants at Sofia Airport Center.

-How important is the professional real estate management for a sus-tainable development as Sofia Airport Center and in general?

-We all know that certified buildings provide a healthier working environ-ment, which increases the effective-ness and the comfort levels of the employees. The most reasonable way to manage sustainable properties is to have seasoned managers, who imple-ment the best practices and increase the value of the assets. There is an upward trend in building certification, but tenants are becoming more demanding not only to their offices but also to the quality of the property man-agement services. Having said that, I believe that we will see increasing number of specialists willing to obtain professional certification.

- Which are the ways to meet tenant requirements? How do you achieve this at your business park?

- First, it is our priority to earn and

maintain the trust of our tenants. We achieve this through an open two-way communication process. Second, we are constantly informing ourselves about the needs of our tenants and provide them with timely responses to their requests. Additionally, we are conducting series of studies aiming to identify the most important factors of the working environment, which make employees feel more comfortable and highly motivated. One of the key find-ings is that employees require a lot more than sufficient technical equip-ment. They want sports facilities, main-tained green areas for walks and relax-ation, variety of dining facilities and indoor parking. In the light of these findings, I assume that the need of sustainable business complexes as our LEED Gold certified Sofia Airport Center is significant and will be increas-ing in the upcoming years.

Employees require a lot more than sufficient technical equipment Says Nikola Ignatoff, Property Manager

The awarded managers of Tishman, from right, Olga Stoichkova, Nikola Ignatoff and Malinka Marinkina.

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- Do you see a recovery in the residential real estate and construction market in Bulgaria? In what direction?

- All indicators that we track point to general recovery in the mar-ket – economic growth, investor sentiment, buying and leasing activity across both the residential and the commercial real estate segments. The signs have so far spread to genuine demand, that is, demand from end users of real estate, private individuals and corporates. This has yet to filter into investment and construction activity. Both have been bottoming out throughout 2013, more so in the residential and office sectors albeit from very low levels. As confidence rebuilds over time the numbers of active developers and investors will gradually increase. It just takes time to assess the opportunities, to agree on pricing and arrange the acquisition of yielding asset or development land. That said, we expect stron-ger investment activity this year as international and local buyers recognize that competition in some segments such as offices and industrial space is at historic lows and persistent demand should spur rental growth for the right projects and locations.

- What would be the most wanted and popular deals in 2014?

- Residential is back for private individuals who are trying to get ahead of the market recovery. This has already prompted stron-ger demand for development land in 2013. From the enquiries from homebuilders we judge that demand is growing for well-lo-cated real estate. A recent sales procedure in a prestigious neigh-borhood we cannot mention attracted as much as 14 bidders.

We also see an active land market for industrial real estate. The lack of modern available buildings has pushed new corporate occupiers in the secondary market but this opportunity is already diminishing. This means that they will either have to purchase land and develop it on their own or to find someone to do it for them within the build-to-suit model. This also means that there will be opportunities for industrial and logistics real estate developers to start new projects. In the office sector, acquisitions of opera-tional buildings are on the radars of both international and domes-tic investors. While internationals would look at income-generating assets, the local players have so far shown higher risk tolerance, often indulging in transactions of distressed or vacant real estate. Both trends are expected to gain strength towards the second half of this year as a number of new and existing players actively screen the market.

On the distressed front, retail is another segment which is coming to the spotlight. The reason is that demand from international occupiers is relatively stable, at least in bigger and in less satu-rated markets, meaning opportunistic investors could profit from turnaround situations. Panorama Mall in Pleven already demon-strated that where a combination of committed investor, profes-

sional service providers and willing sellers exists projects can be successfully revived. As exclusive leasing agent and property manager we helped Panorama Mall open at 80 per cent occu-pancy on April 12 and attracted almost 30,000 visitors in its first day of trading.

-Can you name your recent successful projects?

-Besides Panorama Mall we have been either exclusive leasing service provider or property manager or both on a number of development projects, including Paradise Center, which is the biggest shopping center in Bulgaria with 80,000 sqm of gross leasable area, successfully trading for more than a year now, Polygraphia Office Center, Litex Tower and many others.

But we do not limit ourselves to developments. For us, every successful corporate occupier lease or purchase, every valuation according to the International Valuations Standards is itself a suc-cess. Our alliance with Cushman & Wakefield, the largest non-public commercial real estate services company globally, allows us to act as a two-way gate, linking Bulgaria’s and the world’s economies. We are constantly speaking to and convincing inter-national companies to come to Bulgaria and take advantage of its position within the European Union and its skilled and competitive labor force. By this measure every successful foreign investment with our participation is a success not just for our business but for the country as a whole.

- Which towns/regions in Bulgaria are most preferred for new projects?

- New developments focus on the capital and the next three big-gest cities – Plovdiv, Varna and Burgas. While the office segment has concentrated in Sofia where most of the corporate headquar-ters are located smaller cities and regions can claim their fair share of real estate development in residential, retail or industrial real estate. That said, most recently, there has been a growing interest in second-tier cities from office occupiers in the business process outsourcing sector. Sooner or later office developers will follow them.

Says Michaela Lashova, CEO, Forton

Bulgaria’s Growth Rate and Efficient Allocation of Capital are Vital for Real Estate Business

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A similar pattern is observed on the manufacturing side of the industrial and logistics sector where occupiers are export-oriented and cost-sensitive.

In retail, the big cities have been more or less saturated with modern shopping centers so acquisitions of operational assets are more likely than new developments. That said, a part of the market would most probably focus on projects whose construc-tion is currently on hold or which have high vacancy rates.

-What are the regulatory issues that in some way hamper your business?

-Real estate accompanies nearly every material human activity so it is subject to a large number of regulations, directly or indi-rectly. From a purely land use point the sometimes lengthy procedures, the lack of consistency and predictability in urban planning, the lack of transparency on the city’s strategic deci-sions could all hinder a project or turn down an investor or developer. Yet we should not overstate their significance although they could have spared us some of the boom-period excesses in development. In fact, the market has not been much regulated in the recent past and neither it is now. What really affects real estate business in a profound way is the over-all output of the country, its growth rate and the efficient alloca-tion of capital in productive ways. This is where the market needs more institutional and public efforts. The more investment

flows in the country, domestic or foreign, the higher the potential output of the economy, hence higher real estate utilization and value.

- Your vision and strategy for development of Sofia: cultural capital, the green city, the city of growth, the smart city?

- Perhaps any of the above could define the future of Sofia in their own ways. But from a free market perspective the city of growth looks most plausible and in line with what Sofia’s and Bulgaria’s citizens would expect. First of all urbanization is a global trend which is here to stay. Cities are where talent meets capital to produce positive outcomes to the benefit of both the individual and society. Contrary to the overall negative demographic back-drop Sofia and the next three biggest cities have seen positive population growth over the last ten years. They will continue to attract the most talented and skilled professionals, entrepreneurs and innovators, as well as international and domestic capital chasing new opportunities.

But urban growth does not come without challenges. Higher pol-lution levels, traffic, crime, not to mention terrorism threats could constrain and put at risk the potential rewards. They are already prompting the search for sustainable solutions in and out of the built environment that we operate in. This is Forton’s raison d'être, to help companies sustain growth and minimize risks by selecting right operational setting to maximize their footprint and profits.

Construction of new housing becomes more limited in Bulgaria, according the National Statistical Institute (NSI). The newly built and commissioned residential buildings continued to decline last year. Because of the crisis and oversupply in some areas of the country the developers have greatly reduced their activity.

Last year in the country were commis-sioned 2,199 residential buildings - 200 fewer than in 2012. This number is even smaller that the new buildings placed in service in 2010 - the worst year for con-struction industry and the real estate market (2,350 buildings) according the data of the statistical institute.

Meanwhile the number of the newly con-structed houses dropped to 9,250 in 2013, starting from 9,970 in 2012, 13,953 in 2011 and 15, 711 in 2010.

The new housing construction in Sofia City has dropped by nearly half in a year. Last year 76 new residential buildings were put into operation against 132 in 2012 and 174 in 2011.

Similar is the trend of the new homes

in the capital - last year they were only 284 compared to 634 in 2012 and nearly 1,200 in 2011. In comparison, in 2013 the new housing in areas such as Pleven, Veliko Turnovo, Dobrich and Haskovo was more than in the capital.

The data show that there is pressure on the new construction in Varna, Bourgas and Plovdiv, but the dynamics of the activity in the sector is not as sharp as in Sofia. The seaside market is strongly supported by the demand from Russian-speaking customers.

In Varna the number of the new house

buildings decreased to 427 in 2013 from 443 last year. The number of the com-missioned houses increased to 2,329 compared to 1,944 a year ago.

In Bourgas a smooth decreasing trend has been registered in the number of newly built residential buildings in the last four years. During the past year the number of new residential buildings decreased by 61 to 322, and housing - with less than 200 to 2,732.

In Plovdiv the new commissioned house buildings constantly increase over the last four years, but the number of the houses reduces, the statistics showed.

New Housing DeclinesBy Miglena Ivanova, Investor.bg

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It is a disturbing fact that nearly half of the Bulgarians are threatened with poverty. Statistics are unequivocal. In terms of incomes, the Bulgarians are lagging behind the rest of the Europeans. The speed at which they are trying to catch up does not suggest they will reach the average EU living stan-dards soon.

About 1.6 million people in Bulgaria live on 251 Leva (about 130 Euro) per month, Eurostat data show. Trade unions and business have failed to find a common point on the mea-sures for increasing wages in the private sector. At the same time Prime Minister Plamen Oresharski supports the policy of a gradual income rise, saying that if revenue allows, the minimum wage will reach 450 Leva a month by the end of the government’s term.

Offhand calculations

The minimum working wage at present is 340 Leva (174 Euro) per month and some 38 percent of the gross domestic product (GDP) is spent on wages. Trade unions insist that the minimum wage should rise to 400 Leva (202 Euro), which means that 50 percent of GDP will be spent on wages. What’s more, they set 2017 as a deadline. The busi-ness calls that “fantasies.”

The trade unions have their arguments to demand a sub-stantial income increase.

Bulgaria has the lowest wages in the European Union, according to Eurostat data. Textile workers, librarians, shop assistants and nurses receive well below the average wage in the country. Their wages are about 400 Leva. Public transportation drivers, construction workers and

police officers are better paid. Following are doctors and judges, who get above 1,000 Leva. The average working wage in Bulgaria is 808 Leva (405 Euro). According to data of the Confederation of Independent Trade Unions in Bulgaria (CITUB) more than half of the employed have not

President of Bulgarian Confederation of Independent Trade Unions Plamen

Dimitrov shakes hands with chairman of BSP Sergey Stanishev. Socialists

promised to raise the minimum wage in Bulgaria till the end of the term of

current government.

Prime Minister Plamen Oresharski during a meeting with Laslo Andor -

European Commissioner for Employment, Social Affairs and Inclusion. They

discussed in Sofia the employment and income issues in EU and Bulgaria.

Raising Incomes Hyped, MalignedInequality and low living standards threaten the social peace, trade unions say. A rapid rise in wages will ruin the economy, the government argues

By Marina Tsvetkova

StatisticsEurostat data show that labor costs in Bulgaria in 2013 were the lowest in the EU: 3.70 Euro per working hour. That is 6.5 times below the EU average (23.70 Euro) and nearly 11 times below the costs in Sweden (40 Euro), which is at the opposite pole. In terms of labor productivity, Bulgaria is again at the bottom of the ranking with an even more pronounced difference. Compared with an average of 32.2 Euro per working hour in the EU, output in Bulgaria is 4.8 Euro, i.e. 6.7 times less, and more than 11 times below labor productivity in best performer Denmark. Nevertheless, even during crisis Bulgaria has the fastest growth in labor costs and, respectively, in incomes in nominal terms. For the five-year period since 2008, labor costs have increased by a total of 44.1 percent, compared with an average of 10.2 percent in the EU. For comparison, the highest growth rate among Eurozone countries is recorded in Austria (18.9 percent). At the same time labor productivity has also increased but at a more moderate rate: 10 to 15 percent.

As a whole, Bulgaria does not move from the last place with labor costs and productivity remaining at very low levels and country's catch-up rate is very slow. One reason is the extreme-ly low starting base as a result of the macroeconomic catastro-phe of 1996-97. Another is the fact that Bulgaria produces mainly raw materials and goods and services with a low added value and market price in the global economy.

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received a wage increase in the last five years. The mini-mum working wage today is less than 90 percent of what it was 24 years ago when the changes started. With a differ-ence of 6.1 times, Bulgaria ranks among the top three countries in income inequality between the rich and the poor.

Inequality and low incomes threaten the social peace, CITUB President Plamen Dimitrov said. That is a global problem and solving it requires a real economic environ-ment with minimum labor and social life standards.

For that reason trade unions have demanded that wages should rise 10 to 15 percent a year in the next couple of years in order to keep the young and the qualified staff in the country. “We insist that in 2017 the average working wage should reach 40 percent of the EU-28 average,” Dimitrov said. “Now it is 25 percent. Besides, the minimum wage should be at least 50 percent of the average one. As early as in 2015 wages in all budget-subsidized systems should jump 15 to 20 percent.”

Prime Minister Plamen Oresharski in turn supported a more moderate income rise, saying a more pronounced increase in labor costs would trigger unemployment warnings from the business and higher inflation. He recalled that a mea-sure had been introduced to refund taxes on the minimum working wage.

In a number of cases the unmeasured large-scale wage increase triggers an inflation pressure, which then devalues the currency and renders the nominal wage increase use-less, Oresharski explained. The payment level in Bulgaria depends on the payment in neighboring countries and in countries with similar economic development, he added.

Oresharski underscored that the low income taxation par-tially cushioned the big wage gap between Bulgaria and the EU countries. Also, the development of the global crisis showed how countries that had allowed a fast wage rise lost in economic performance.

The wage level in Bulgaria is among the lowest in the EU and that explains its dynamic increase. The situation is similar when seen as a relative share of the value added, said the prime minister and explained that Bulgaria was not a Eurozone member but its currency had been pegged to the Euro for 16 years, which placed it in the position of one of the poor countries admitted to the Eurozone.

Officially

According to Bulgaria’s Convergence Program for 2014-2017, which is due to be sent to the European Commission (EC), labor incomes in Bulgaria will be rising almost insignifi-cantly, by an average of 3.5 to 5.5 percent a year in nominal terms in the next three years. Government experts say that the high unemployment levels will continue to restrain labor income growth. Forecasts show that unemployment will drop by just 0.1 percentage points to 12.8 percent this year. In the next three years the situation will improve gradually and in 2017 unemployment is expected to fall to 10.9 percent.

The state-regulated incomes, however, will be increasing. The minimum working wage will reach 380 Leva from 2015, 420 Leva from 2016, and 450 Leva from 2017. From July 1 every year pensions will be updated according to the Swiss rule but no exact calculations have been made.

The Convergence Program also provides for an increase in the contributions for second-pillar pension from 5 to 7 per-cent from Jan. 1, 2017. The document does not specify whether that will be done by reducing the contributions to

List of European countries by average monthly wageState net $ net € dateLiechtenstein 5850 5166 2008Monaco 6077 4436 2012Switzerland 5600 4047 2011Norway 4900 3527 2013Luxembourg 4230 3189 2010Denmark 4275 3113 2012United Kingdom 3460 2496 04/2013San Marino 3274 2390 2014Finland 3180 2321 3Q2013Sweden 3261 2268 2012Andorra 3055 2230 12/12Ireland 2916 2160 3Q2013Netherlands 2671 2136 3Q2012France 2953 2128 2013Austria 2796 2114 2012Germany 2824 2054 3Q2013Belgium 2627 1946 2013Italy 2610 1898 05/2013Iceland 2617 1895 2012Cyprus 2500 1833 3Q2013Spain 2220 1615 05/2013Malta 1486 1092 2Q2013Slovenia 1310 1000 12/12Estonia 1368 986 08/13Turkey 1 244 895 2012Portugal 1090 805 11/12Greece 964 804 2013Croatia 959 712 02/13Czech Republic 980 705 2013Poland 945 681 4/2013Slovakia 887 638 2013Russia 833 637 03/2014Lithuania 720 524 4Q2013Latvia 691 504 12/13Hungary 680 492 02/14Montenegro 661 486 12/13Serbia 585 436 12/13Bosnia and Herzegovina 567 422 08/13Kazakhstan 548 421 2013Romania 534 395 12/13Albania 436 370 Q3 2013Belarus 521 353 11/2013Macedonia 475 346 01/14Bulgaria 461 333 Q4/2013Moldova 263 181 12/12Ukraine 230 164 02/14

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the fist-pillar Pension Fund of the National Social-Security Institute or by increasing the aggregate social-security bur-den of employers and employees. Important decisions will have to be made by this year’s end: on raising the retire-ment age and the pensions of people in the first and second labor category, as from Jan. 1, 2015 the pensions will have to be fully paid by the private occupational funds.

The revised forecast shows a much more gradual increase in pension expenditure in the coming years, which is mainly due to the higher retirement age. Pension expenditure will rise from 9.92 percent of GDP in 2010 to 10.60 percent in 2060, compared with the previously planned 11.06 percent. At the same time the gap between pensions and wages will be widening. The so-called replacement ratio will drop from 45 percent in 2014 to 37.5 percent in 2060.

The biggest expenditure rise by 2017 will be for the mainte-nance and operation of the administration, the Convergence Program shows. The maintenance of the so-called general public services will go up from 3.7 to 4.7 percent of GDP.

Bulgaria will keep the expenditure on agriculture, transport, communications and energy at a relatively high level, 4.9 percent in 2017, but the money for education will decrease to 3.4 percent. The share of healthcare expenditure will remain unchanged at 4.6 percent of GDP.

The country will continue lagging behind the European trend in defense financing. In the next three years the government does not plan raising the share of GDP for defense, which will stay at its current level of 1.1 percent. This is the small-est share of financing for the sector in recent years: even at the peak of the crisis in 2009 it was 1.3 percent of GDP. In the EU countries, defense expenditure averaged 1.5 per-cent of GDP in 2012 and the plans are for preserving that level until 2017.

Revolutionary

The rapid income hike by some 20 percent is possible and can lead Bulgaria’s economy out of the current deadlock, say economists Hristina Vucheva (finance minister in 1994-1995) and Mika Zaykova. To raise pensions, unemployment and social benefits and maternity and child allowances the government will have to borrow some 1 billion Leva, Vucheva reckoned. It will have to float government securi-ties on the Bulgarian or foreign markets. The problem is that the debt will be more expensive than previous ones, which will be repaid at a bearable yield of 3 or 4 percent, she said.

Theoretically, such an increase in the money supply can boost turnovers in the country by some 2 or 3 billion Leva and set the wheel in motion. If the business achieves a good growth rate, the loan will be repaid without dramatic conse-quences. Hungary is such an example. Anyway, the govern-ment has to do something to overcome the economic stu-por, the two economists said. As for the size of the debt and the income increase, that is a question of calculations that are not so difficult, Vucheva said.

According to her the government has fallen short of expec-tations that it will draw up a real program and implement it. Vucheva said, “They did not sit down and calculate what would happen if the salaries of doctors and teachers for instance were increased rapidly.” In her words what tran-spires through the cabinet’s decisions and programs is “Brussels’ wording, which is useless.”

Incomes in Bulgaria are despairingly low, Zaykova said. The country is full of working poor, who every year leave to cre-ate national product in other countries. That process should be terminated. When you are so far behind, you have to risk something to become attractive.

The low labor costs for now are part of the price of lagging behind and catching up, said Lachezar Bogdanov, manag-ing partner at research and consulting firm Industry Watch. Poverty in Bulgaria is connected with the deficit of knowl-edge and technology, equipment, patents, intellectual prop-erty, infrastructure and capital. The way to catch up with the rest is to attract those who have more and make them invest in your economy.

IntentionsAn additional 100 million Leva will be allocated to wages, healthcare and municipalities each in 2015. That is envis-aged in the 2015-2017 budget forecast of the Ministry of Finance. As much as 4.2 billion Leva is budgeted for wages in all ministries, agencies, municipalities, courts of justice and other institutions in 2014 and next year the amount will increase to 4.3 billion Leva. The budget for health insurance payments and subsidies for the municipalities will increase by 100 million Leva each to 2.6 billion Leva and 2.5 billion Leva respectively. The municipalities can use the additional money both for administration maintenance and for capital costs. The public investment program, Growth and Sustainable Development of the Regions, will continue to function next year with another 300 million Leva having been planned for municipal projects. The biggest increase in the 2015 budget is for pensions: by 255 million Leva to 8.38 billion Leva.

The budget forecast also sets ceilings on the ministries’ costs in the next three years. For most ministries the differences from this year are not substantial. The bigger increases or decreases for some are probably connected with pending structural changes but they are not specified in the docu-ment.

The 20-percent surcharge on electricity generated from wind and solar energy is envisaged to be preserved. The expected budget revenue from it is 150 million a year in 2015-17. The dividend income for the state in 2015-2017 is calculated on the basis that the state will receive 70 percent of the profit of public-owned companies in 2015, 60 percent in 2016 and 50 percent in 2017 with the projected income for the period being respectively 146.6 million Leva in 2015, 150.3 million Leva in 2016 and 126.8 million Leva in 2017. The revenue from privatization and post-privatization control is budgeted at 55.1 million Leva in 2015, 13.7 million Leva in 2016 and 36.7 million Leva in 2017.

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Banks have reported a profit again in February. The banking system has sustained its high liquidity, the upwards trend in the deposit base continues during the first two months of the new year, while the demand for loans in February is driven mainly by companies, not households.

This is happening on the background of the higher net inter-est income (the difference between interest income and interest expense), the lower accumulated impairment of assets as compared to one year ago, but also the higher net fees and commissions expenses of the financial institu-tions.

No significant changes are noted in the structure of the bal-ance sheets of the lending institutions, representatives of the Bulgarian National Bank (BNB) have pointed out.

There is no change in the top five banks reporting the high-

est amount of assets as at the end of February. UniCredit Bulbank, Bank DSK and First Investment Bank are still in the leading positions, followed by Corporate Commercial Bank and United Bulgarian Bank. What are the results reported by each one of them we will know at the end of April when BNB will publish the detailed financial state-ments and additional information regarding the performance of each bank during the first quarter of 2014.

In February banks have added another BGN 77 mln to their profits. The increase as compared to January is by 6.94%, and as compared to a year ago – by 60.42%. Thus, the total profit of banks in Bulgaria during the first two months of 2014 amounts to BGN 149 mln.

BNB data also show that as a result of the dynamics in attracted funds the total assets of the banking system have increased by BGN 271 mln. However, the amount added to the assets is 51% lower than that in January, when it grew by BGN 556 mln. Nevertheless, the assets of financial insti-tutions have increased by 4.48% as compared to the prior

Banks Have Earned BGN 7 7 mln in Februar yThis represents a 7% increase on a monthly basis and a 60% increase year-on-year

By Svilen Kolev, Peter Neykov

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year, or by approximately BGN 3,711 bln up to BGN 86,574 bln.

The net interest income – the difference between the banks' interest income and interest expenses – in February has gone up by 5.57% year-on-year, reaching BGN 422,509 mln. According to the statistic information, however, banks incur increasing fees and commissions expenses. They have increased by 12.45% as compared to the prior year, while fees and commissions income is down by 2.64%.

Banks generate interest income and fees and commissions income mainly based on their lending activities. This refers mainly to interest on loans paid by households and compa-nies. However, with the entering into force of administrative amendments banks may suffer twofold. First – decreasing fees and commissions income, and second – decreasing net interest income, due to the higher interest expenses that banks pay on deposits, for example.

The administrative amendments envisage the introduction of a limit of expenses on loans and cancellation of some fees and commissions, such as fee for early repayment after the first year. As a whole the decision is that bank services are to be based on a market principle. We are still to find out what effect these will have on the financial performance of the banks, but currently they are doing well.

Companies have sought more loans during the past month.

Loans to companies have increased by 0.5% during this month as compared to January, or by BGN 291 mln. The increase in corporate loans by BGN 369 mln (1%) is accom-panied by a decline in the other loan portfolio segments, indicates the statistic information of BNB.

The exposures of individuals are at the very opposite. In February the demand for loans still decreases at a pace similar to the one during the first month of the year, namely – by 0.2 percent. Consumer loans are down by BGN 23 mln, and residential mortgage loans – by BGN 17 mln.

Impairments amounting to BGN 111 mln were accrued dur-ing the prior month compared such amounting to BGN 151 mln in February 2013. The liabilities of the lending institu-tions have increased by BGN 184 mln. During the second month of the year BNB reports a trend different than the one noticed in January with respect to this indicator – funds attracted by the banks increase although slightly (by BGN 33 mln), while those attracted by institutions other than the lending institutions report a decrease (by BGN 50 mln).

The Central Bank data indicate that the free bank resourc-es are invested in debt instruments – such as available-for-sale and held to maturity instruments. The dynamics in the sources of financing and the assets do not have mate-rial impact on the banking system's liquidity position – it remains high and as at 28 February 2013 the liquidity ratio is 29.69%.

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Sustainable development of the City of Sofia, EU funded infrastructure proj-ects, transportation system improve-ments, waste disposal management, and public-private partnerships were at the focus of the AmCham business breakfast with the Sofia Mayor Yordanka Fandakova.

The event was attended by over 80 busi-ness representatives of AmCham mem-ber companies and media. During the meeting the mayor stated that the Municipality is ready to work closely with the AmCham business community.

According to Fandakova, a total of 47 EU-funded projects worth 2.88 billion Leva are currently implemented in the capital. Moreover, in recent years the Sofia municipality has achieved financial stability and maintained the capital’s credit rating – BBB, which is equal to that of the country. The mayor underscored the fact that the financial stability is a result of a strict financial discipline and

increased collection of fees and taxes.

Infrastructure and Transport

With regards to the sensitive transporta-tion and traffic issues, the mayor men-tioned two projects related to the subway construction. Currently the subway is 31 km long with 27 stations, and its share in the system of public transport is 26 per-cent. Expansion of existing subway lines and building of the new lines is among leading infrastructure projects:

“Tsarigradsko Shosse Blvd. - Sofia Airport” section which has a length of 4.9 km and four stations and it will be completed in April 2015.The “Mladost 1 - Boulevard Business Park” section with 2.5 km in length, three stations and one underground parking, which is planned to be com-pleted by April 2015.

Among the other important projects in Sofia mentioned by Fandakova were the

two-level intersection on Yavorov Blvd. and Dr. Tsankov Blvd. to the TV Tower (2012); the two-level intersection on Academic Geshov Blvd. and Georgi Sofiyski St. (2013). Projects under devel-opment are crossings on the transporta-tion hub of Lion's Bridge and Peyo Yavorov Blvd. – St. Mihaylovski St.

The mayor also said that in 2013 was launched the program for renovation of the main streets and boulevards. One of the major repairs in the program is Tsarigradsko Shosse Blvd. The munici-pality is currently executing works under the overpass G.M. Dimitrov Blvd. and then it will work on the overpass Alexander Malinov St.

Other sites of the renovation program are the repairs on Nickola Mushanov Blvd. from Vazkresenie Blvd. to Zhitnitsa St., Botevgradsko Shosse Blvd, and G. S. Rakovski St.

Rehabilitation of the track on Boulevard

Sofia’s Mayor Announces New Projects

Mayor of Sofia Yordanka Fandukova meets with Valentin Georgiev, executive director of AmCham (left) and Peter Lithgow, AmCham president.

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Bulgaria from Vitosha Blvd. to Borovo is a component of the Project for Integrated Metropolitan Public Transport imple-mented with the financial support of EU’s OP Regional Development 2007-2013.

The project is executed under a contract for granting financial aid signed between the Sofia Municipality and the Ministry of Regional Development in August 2011.

Environment and Waste Management

During the meeting Mayor Fandakova pointed out that the establishment of integrated system for waste treatment of Sofia is a leading environmental project. The municipality completed the first phase of an integrated system of facilities for treatment of household waste: the non-hazardous waste land-fill site Sadinata and wastewater treat-

ment plant, plus some supporting infra-structure.

In January 2014 installations for treat-ment of green and organic waste were commissioned on Han Bogrov site. A

working draft of installation of mechanical biological treatment is currently revised.

The mayor provided some details on the exit installation’s capabilities:

Recycled materials - about 39,043 tons / year (including metals, plastics and paper);RDF - about 178 tons / year;Compost material - about 399 tons / year;Residues - about 76 tons / year;Process losses (humidity) - about 115 tons / year

Energy Efficiency Measures

95 percent of municipal kindergartens and schools have implemented partial energy efficiency measures. The win-dows in 117 schools and 137 kindergar-tens have been replaced since 2006. Fully renovated are 16 schools and 32

kindergartens.

Solar panels heat the water in eight childcare facilities. In 2014 energy effi-ciency measures will be implemented in 23 kindergartens and three schools with funding from the international fund “Kozloduy.”

Healthcare

The mayor announced a technological renovation and repair of the specialized hospital for active treatment of cancer for 5.7 million Leva. The reconstruction envis-ages renovation of buildings and premises of health facilities, supply and installation of specialized medical equipment.

Mayor Fandukova has a word with AmCham board representatives during the business breakfast.

Mayor of Sofia Yordanka Fandukova.

Sofia Hotel Balkan hosted the business breakfast with 80 business representatives.

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Edenred® celebrated its 10th anniversary in Bulgaria in the presence of Jacques Stern, Chairman and CEO of Edenred® and Vassil Mirtchev, Founder and Chairman of the Board of Directors of VM Finance Group®.

On this occasion, a business cocktail gather-ing customers, business partners and stake-holders of Edenred Bulgaria was held at Novotel Sofia on 14th April, with the support of the American Chamber of Commerce and French-Bulgarian Chamber of Commerce.

The event also served to officially celebrate the joint venture between Edenred®, the world leader in pre-paid corporate services, and VM Finance Group®, a major economic Bulgarian conglomerate, announced in the late 2013. The business cocktail was honored by the presence of more than 150 guests and provided opportunities for meeting representatives of the Bulgarian business community and establishing new business relationships.

Jacques Stern, Chairman and CEO of Edenred®, gave a speech about Edenred’s perspectives and ambitions world-wide but also about how the joint venture with a reliable and recognized Bulgarian partner as VM Finance Group®

will accelerate the development in the country and help to better unlock the potential of the market. He also men-

tioned that Edenred Bulgaria is now in a position to provide innovative solutions as it has reinforced its market position and at the same time has reached more than 100 000 beneficiaries of its solutions in Bulgaria, which is also a great success for the company.

Vassil Mirtchev, Founder and Chairman of the Board of Directors of VM Finance Group®, also explained that Edenred®

and VM Finance Group® share the same values and vision and highlighted the partnership with a global leader like

Edenred as a clear recognition of success.

In a few months, the venture, which is the result of combin-ing VM Finance Group’s Menew® business with Edenred’s business in Bulgaria has indeed acquired the status of a leader in the local market in the challenging yet promising market of Employee Benefits and showed its clear ambi-tion to open up new growth opportunities.

Edenred Bulgaria also rewarded customer loyalty present at his side since 2004 by delivering a special certificate to four of them during the ceremony and a prepaid gift card Compliments® Card – the first digital solution on the B2B market, launched by Edenred in 2012.

Edenred Marks its 10th Anniversar y in BulgariaEdenred® and VM Finance Group® Create Joint Venture

From left: Vassil Mirchev, Jacques Stern.

From left: Arnaud Erulan, Vassil Mirchev, Jacques Stern, Medhi Benbouguerra, Herve Combal.

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Traditionally ContourGlobal Maritsa East 3 joined the ILO’s World Day for Health and Safety at Work initiatives

The company also held the fifth edition of its Safety Focus Day Campaign

How to stay healthy and safe while working with chemical sub-stances – that was the topic of this year’s program of events at ContourGlobal Maritsa East 3 within the worldwide celebra-tions of the World Day for Health and Safety at Work. Traditionally, the program at the power plant at Galabovo Municipality included an interactive seminar and a global webi-nar, awarding of the Q1 winner in the hazards and near miss reporting competition, and honouring of the people who lost their lives fulfilling their duties at work.

“Safety at work is a goal that requires our ceaseless efforts and attention. As so many other businesses today we have no other choice but to be prudent in fulfilling our everyday duties and conscientious in observing the adopted safety rules every single minute”, said Garry Levesley, CEO of ContourGlobal Maritsa East 3. “But staying safe at the power plant also teaches us to stay safe at home, on the road, and with our families. Safety becomes part of our DNA, part of our cul-ture.”

The 2014 initiative dedicated to health and safety in working with chemical substances combines in a unique manner two of ContourGlobal Maritsa East 3’s leading values: ecology and safety. Moreover, it underlines the integrated essence and efficiency of the Environment, Health and Safety Management System.

As a part of the programme, the team at ContourGlobal Maritsa East 3 TPP participated in an interactive seminar which taught them how to work with chemical substances, gain command of spills, and act in case of burning with chemicals.

In the morning the workers laid flowers at the Memorial Plate

at the power plant paying homage to all the people who died in workplace accidents in Bulgaria and abroad. Standing at the plate where the names of those who lost their lives in the fatal accident at the power plant on October 10, 1994 are written, they promised not to allow any more accidents in the future, to change behavior and to address any unsafe behavior.

The program continued with the drawing of the Q1 winner of the near miss and hazards reporting competition. During the period there were more than 900 reports which were evaluated as part of the quality control of the reporting. The winner, Marian Kunev, whose name was drawn by Quinto Di Ferdinando, Plant Director, was awarded a voucher worth BGN 300. However, this was the only case in which luck played a decisive role in any initiative at the power plant. The competition which is held traditionally every quarter encour-ages employees to share information and show that they have the feeling of ownership of the plant. It appeals for a more secure and safer working environment and zero tolerance towards dangerous behavior of both employees of the com-pany and subcontractors. This is a particularly strong message on the eve of the repair campaign at the power plant.

The local program was later expanded with a global webinar which presented ContourGlobal’s H&S performance year-to-date, as well as it is an excellent channel for best practices sharing, cultural exchange, and increasing the knowledge among the company’s personnel globally.

The Safety Focus Day is a global internal initiative introduced by ContourGlobal in the early 2013 and held every quarter. It aims at improving the safety indicators, raising the awareness of the company’s staff around the world and developing global safety culture. It is part of the vast Safety Communication Platform of ContourGlobal Maritsa East 3 TPP which focused on procedures, best practices, motivation, as well as on the prevention of occupational diseases, prevention of oncological diseases, introduction of the newly-adopted LOTO safety sys-tem, etc.

Safet y at Work – a Growing Priorit y of a Sustainable Business

Mr. Quinto Di Ferdinando draws the name of the winner in the near miss and

hazards reporting competition.

ContourGlobal Maritsa East 3 employees lay f lowers at the Memorial Plate at

the power plant.

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AON Hewitt presented in May the recent trends of work satisfaction highlighting difference in the opinions of managers and employees. The study covers the opinion of 16,000 employees and 400 top managers in Bulgaria. In 2013 the average level of engagement of top management in Bulgaria is 77%, while employees’ rate is 53%. The largest discrepancies between the satisfaction of the manag-ers and the employees are in terms of additional benefits and career opportunities.

Each group shares its level of satisfaction with the working condi-tions and working environment in 19 areas. The analysis shows 79% of top managers agree the additional benefits provided by the employer meet their needs, while the percentage of employees is only 46%. Additional benefits may include insurance, health ser-vices, company transport, food vouchers and other. Largest bud-gets for additional benefits are planned in the sectors of high tech-nology and outsourcing services. The discrepancy relative to the satisfaction of benefits alerts insufficient expedient planning, imple-menting and communicating with employees. This means that spending budgets for benefits can be optimized significantly with proper survey of employees’ views, characteristics of suppliers and effective communication to employees.

Regarding to career opportunities - 68% of top managers believe that the company provides good career opportunities to employ-ees, but only 39% of employees say that career opportunities in the company where they work are good. As comes to the recognition - nearly 70% of top managers say that employees receive proper recognition for their work. Divergence from the perspective of employees is indicative of how many of them actually feel like the

most valuable asset of the company in which they work - 43%.

69% of top managers say they treat employees as the most valu-able asset of the company when measuring people focus. At the same time only 41% of employees believe that top managers refer to them as the most valuable asset. Regarding training and devel-opment 72% of top managers believe that their company provides the necessary training and development opportunitiesin order to be successful within the organization, while only 52% of the employ-ees support this statement.

Top managers in Bulgaria are most satisfied with their everyday work (84%), overall work satisfaction (82%) and the physical work environment (84%). The other factors that receive the highest sat-isfaction appraisal of the employees are: relations with line manag-ers (62%), relationships with colleagues (63%) and physical work environment (65%). Almost same levels of satisfaction exist in Central and Eastern Europe. Both top managers and employees in Bulgaria follow the trends in the region. Management teams in CEE give the highest rate to every day work (83%), overall work satisfac-tion (81%) and physical work environment (89%). Officials in the region are most satisfied with relations with line managers (62%), relationship with colleagues (64%) and physical work environment (68%).

Aon Hewitt conducts the survey in our country for the eighth year and compares data with 11 other European countries from Central and Eastern Europe.

43% of Employees Versus 63% of Top Managers Consider Themselves Recognized in the Company

n e w m e m b e r s

Amway is one of the World’s larg-est direct selling

companies. Founded in 1959 by Jay Van Andel and Rich DeVos, Amway Operates in more than 100 countries and territories in Asia, Africa, Australia, Europe and the Americas. Amway has more than 21,000 employees around the world. In addition, more than 3 mil-lion Amway distributors sell the compa-ny's products worldwide. More than 450 unique, high-quality products carry the Amway name in the nutrition, beauty and home categories. Top-selling Amway™ brands include:

NUTRILITE™, the world’s number one selling vitamins and dietary sup-plements brand.ARTISTRY™, among the world’s top five largest-selling premium skin care brands.eSpring™, the world’s number-one

selling brand of home water treat-ment systems.

Contacts:Ioana Enache

General ManagerTel.: +40 21 2020000

241A, Barbu Vacarescu Str.Bucharest

Helios Power is a Bulgarian shareholding company (Identification Code BG 130390856)

incorporated in the year 2000. The premises of the company are regis-tered at the following address: Bulgaria, 1000 Sofia, 96, Rakovski Str.

The registered capital of the company is BGN 2000000 (about EUR 1023000) distributed in 20000 ordinary shares with nominal value of BGN 100 each.

Helios Power is an investment, man-

agement and consultancy company, specialized in development of invest-ment projects in the field of renewable energy sources (RES). Helios Power has incorporated a number of SPV companies and each of them devel-oped and is currently operating a sep-arate photovoltaic project in Bulgaria altogether totaling to almost 20 MWp installed capacity. Besides that, the company is holding several packages of shares in different companies and joint ventures, specialized in different activities: general and investment con-sultancy, energy, construction, finan-cial brokerage, etc.

Contacts:Ivo Ivanov, Chairman of BoD

Tel.: + 359 2 401 81 00Address: 96, G. S. Rakosvki Str.

1st floor1000 Sofia

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s p o r t s

The U.S. men's national soccer team, like many squads throughout the world, has taken on a decidedly international feel for the 2014 World Cup.

The 30-man preliminary World Cup roster features players six players who grew up in Germany, a forward who grew up in Iceland, and a midfielder who was born in Norway. It also includes multiple U.S.-born players who were eligible to play for Mexico.

The team mirrors the multicultural nature of the country itself. It's something Jurgen Klinsmann vowed to do when he took over in 2011 after a series of high-profile American players snubbed the U.S. to play for the likes of Italy and Serbia.

More than a quarter of the roster (8 out of 30 players) grew up outside the U.S.:

Germany is the country that stands out here. There are six German-Americans on the 30-man roster. The explanation for this is simple: the U.S. has had tens of thousands of troops stationed in Germany for 60 years — creating a pool of U.S.-eligible kids who grew up in a soccer-mad culture.

Klinsmann is a German soccer legend. He won a World Cup for West Germany as a player in 1990, and coached the German national team to a surprisingly deep 2006 World Cup run. He made it a priority to identify Germans with U.S. eligibil-ity and recruit them into the national team once he took over the USMNT. This has been a source of controversy at times. For example, 18-year-old Julian Green — who was born in Tampa but grew up in Germany — made the 30-man roster despite having virtually no top-flight professional experience.

It also created a rift in the team that went public after a poor result against Honduras in World Cup qualifying last year. But it also grew the player pool and gave the U.S. depth at a num-ber of positions.

Here's the state/country breakdown of all 30 players:

California (6 players): Michael Bradley, Joe Corona, Landon Donovan, Maurice Edu, Nick Rimando, Chris WondolowskiGermany (6 players): Terrance Boyd, John Brooks, Timothy Chandler, Fabian Johnson, Julian Green, Jermaine JonesFlorida (3 players): Jozy Altidore, Alejandro Bedoya, Graham ZusiTexas (2 players): Clint Dempsey, Omar GonzalezNorway (1 player): Mix DiskerudIceland (1 player): Aron JohannssonWashington (1 player): DeAndre YedlinKansas (1 player): Matt BeslerIllinois (1 player): Brad GuzanIndiana (1 player): DaMarcus BeasleyMissouri (1 player): Brad DavisVirginia (1 player): Clarence GoodsonMaryland (1 player): Kyle BeckermanArizona (1 player): Brad EvansNew Jersey (1 player): Tim HowardMassachusetts (1 player): Geoff CameronRhode Island (1 player): Michael Parkhurst

Unsurprisingly, southern California dominates domestically, putting them on par with Germany as the primary source of U.S. talent. The roster will be trimmed to 23 players before the team takes off for Brazil.

U.S. National Soccer Team for World Cup 2014 comes from… Germany and California

By Tony Manfred/Business Insider