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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case BG-2020-35/1085 – measures in Bulgaria

Support for medium-sized enterprises

Подкрепа за средни предприятия

Country Bulgaria , applies nationwide
Time period Temporary, 24 August 2020 – 30 November 2020
Type Tripartite agreements
Category Supporting businesses to get back to normal
– Measures to support a gradual relaunch of work
Author Tsetomila Sabcheva and Luboslav Kostov (Citub) and Eurofound
Case created 10 September 2020 (updated 28 January 2021)

Background information

The programme offers operating capital for Bulgarian medium-sized enterprises to deal with the consequences of the COVID-19 pandemic. The total amount of the grant is €102,26 million.

It is a state aid programme in the form of direct grants under Section 3.1 of the 'Temporary Framework for State Aid Measures to Support the Economy in the Condition of the Current COVID-19 Outbreak' of 19 March 2020.

Eligible candidates :

  • Legal entities or sole traders , registered in accordance with the Commercial Act or the Cooperatives Act. Branches of legal entities registered in Bulgaria cannot participate in the project selection procedure;
  • Only candidates who have at least two completed financial years before the date of announcing the procedure, within which they have carried out economic activity;
  • Only applicants who meet the requirements for a medium-sized enterprise under the Small and Medium-sized Enterprises Act and the Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ L 124, 20 May 2003, page 36).
  • Applicants must have a turnover for 2019 equal to or exceeding € 500,000.
  • Applicants may participate in the project selection procedure and receive a grant if they are not eligible applicants under the demarcation line with other EU-funded plans and programs .
  • Applicants who have registered a decrease of at least 20% in the turnover for one of the calendar months in the period from 01 February 2020 to the month preceding the month of application compared to the turnover for the same month in 2019;
  • The applicant should choose one of these calendar months and indicate it in the Declaration of Financial Data;
  • As at 31 December 2019, the applicant company is not in a difficult situation.

Content of measure

The state's aid starts from € 15,000 and goes up to € 75,000. However, the requested grant may be a maximum of 3% of company's turnover for 2019.

Eligible activities:

  • Activities needed to address the lack of funds or lack of liquidity resulting from the COVID-19 epidemic.

Eligible costs:

Working capital, including:

  • Expenses for purchase of raw materials and consumables;
  • Expenses for external services (incl. Overheads);
  • Staff costs (including gross salary costs and expenses for social security and health contributions at the expense of the employer) under employment contracts concluded before 01 July 2020.

In order for the remuneration expenses to be eligible, they should be up to the amount of the employment relationship as of 01 July 2020, but not more than € 1,000 .

Maximum duration of the projects: 3 months (The specified duration may be shortened by the beneficiaries in case of early implementation of the activities).

Use of measure

As of October 2020, 1,932 project proposals worth nearly BGN 264 million (€132 million) have been received.

After an additional evaluation by Ministry of Economy (Source from 18 December 2020), 1,703 project proposals with a total approved amount (grant) of BGN 233,645,650.49 (€119,461,124.17) were successfully evaluated under the procedure. Of these, 1,285 project proposals with a total grant amount of BGN 178,532,856.49 have been proposed for funding.

The reserve project proposals under the procedure are 418 with the amount of the approved aid of BGN 55,112,794.00 beneficiary, including the rules in the application conditions.

In case of residual financial resources under the procedure after the agreement with the proposed for funding, a grant may be provided for the applicants from the lists of reserve project proposals in the order of their ranking and until the available budget for the procedure is exhausted.

Contents

  • Employment retention
  • Income protection
  • Pay freezes or cuts
  • Pay increases

Target groups

Workers Businesses Citizens
Employees in standard employment
SMEs
Does not apply to citizens

Actors and funding

Actors Funding
National government
European Funds
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Consultation through tripartite or bipartite social dialogue bodies Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: Unknown

Involvement

All representatives of the social partners were informed about the measure and it was consulted with them. Several working meetings and a final conference were held at which the measure was announced together with the representatives of business and trade unions. Business played a key role, as it is the direct beneficiary of the measure.

The Bulgarian Industrial Association (BIA) is monitoring closely the implementation of the programmes related to business. The association is sending reports and improvement suggestions based on companies feedbacks to the government.

Views and reactions

All social partners unanimously supported the measure, as it enables both small and medium-sized businesses and workers. Some of the funds are intended to be spent on salaries, which the unions welcome. In Bulgaria, over 90% of businesses are classified as "small and medium" . In this sense, the measure itself is fundamental to the recovery of Bulgaria's economy from recession.

All social partners supporting the measure: Trade Unions:

  • Confederation of Independent Trade Unions in Bulgaria - CITUB
  • Confederation of Labor "Podkrepa" - KT PODKREPA

Employers:

  • Confederation of Employers and Industrialists in Bulgaria - CEIB (KRIB)
  • Bulgarian Industrial Capital Association - BICA
  • Bulgarian Industrial Association - BIA
  • Bulgarian Chamber of Commerce and Industry
  • Union for Private Economic Enterprise

However, some criticism is expressed towards the heavy requirements for the applying companies, slow and intransperent application processing.

Sources

  • 28 May 2020: On the OPIC procedure for support for medium-sized enterprises to overcome the consequences of covid-19. (www.bia-bg.com)
  • 01 July 2020: BIA Reports (www.bia-bg.com)
  • 13 August 2020: СЪЮЗЪТ ЗА СТОПАНСКА ИНИЦИАТИВА УЧАСТВА В СРЕЩА С МИНИСТЪРА НА ИКОНОМИКАТА ЗА ОБСЪЖДАНЕ НА НАПРЕДЪКА ПО ИЗПЪЛНЕНИЕ НА АНТИКРИЗИСНИТЕ МЕРКИ И НОВИТЕ ОПЕРАЦИИ ЗА ПОДПОМАГАНЕ НА МСП ЗА ПРЕОДОЛЯВАНЕ НА ИКОНОМИЧЕСКИТЕ ПОСЛЕДИЦИ ОТ COVID-19 (www.ssibg.org)
  • 13 August 2020: Среща със социалните партньори на министърна на икономиката (news.bg)
  • 24 August 2020: „Подкрепа за средни предприятия за преодоляване на икономическите последствия от пандемията COVID-19“ (opic.bg)
  • 06 November 2020: More than BGN 400 million from the anti-crisis package are already with companies and citizens (www.banker.bg)
  • 18 December 2020: Напредък по антикризисните икономически мерки изпълнявани от Министерството на икономиката за преодоляване на негативните ефекти от пандемията върху българската икономика (mi.government.bg)

Citation

Eurofound (2020), Support for medium-sized enterprises , case BG-2020-35/1085 (measures in Bulgaria), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.