April 27, 2023
Ambassador Kenneth Merten Welcome Remarks to the American Chamber of Commerce in Bulgaria
Location: Grand Hotel Millennium Sofia
Thank you for that warm introduction!
Good morning, members of AmCham! Particularly AmCham CSO Ivan Mihaylov, AmCham President Olivier Marquette, members of the AmCham Board of Directors, distinguished guests:
I really appreciate this very warm welcome to Bulgaria. It is great to be back in this part of Europe again. Since my last assignment in Eastern Europe, as U.S. Ambassador to Croatia from 2012 to 2015, the importance of this region has only grown, not only because of its strategic location on the eastern flank of NATO, but also because sound economic fundamentals have increased opportunities for growth and for increased collaboration with the United States.
Just a few words of background about me: I have been in the diplomatic service for 35 years. Most of my time overseas has been spent, aside from being ambassador twice before, working on economic and commercial policy. So, I have spent a lot of time working with American Chambers of Commerce in Brussels, with the EU committee, with the American Chamber of Commerce in Haiti, the American Chamber of Commerce in Paris and the American Chamber of Commerce in Zagreb, Croatia. I have a lot of familiarity working with your colleagues in those countries. I have always found them to be some of the most productive relationships we have. You all here bring a lot to the table – in Bulgaria and wherever your companies are. You pay taxes, you create jobs, but most importantly, you create opportunities. And those are important things so we at the Embassy hopefully can work together with you to create more opportunities for folks here in Bulgaria, but also for American firms.
I’ve only been on the ground for a few weeks now, I’m still very much in learning mode – so I look forward to meeting with you and hearing more. I’m especially looking forward to meeting and learning from all of you about your experiences working to strengthen economic ties between the United States and Bulgaria.
As I said in my confirmation speech before the U.S. Congress, Bulgaria is a strategic partner and Ally of the United States. Our two nations are working side by side on a broad range of issues – bilateral, regional, and global – ranging from security cooperation and energy diversification to regional integration and upholding global democratic norms. We’re also commemorating, as our colleague mentioned, a special anniversary this year, of 120 years of diplomatic relations between Bulgaria and the United States. Our team has been working with local partners on a range of activities throughout the year to mark this auspicious occasion, including a festival in Burgas at the end of May that will feature American culture, products, and innovations. I’m also proud to see a greater bilateral commitment to growing people to people ties through exchange programs like Fulbright, the International Visitors Leadership Program, and the Summer Work and Travel program which sends thousands of young Bulgarian leaders to the United States every year.
Our strong and growing commercial ties are vital to the U.S.-Bulgaria strategic partnership. In the last few years, we’ve seen bilateral trade bounce back to a higher level than before the start of the Covid pandemic. Additionally, within the South-East European region, Bulgaria continues to grow exports year over year. This is a testament to Bulgaria’s fundamentally strong and growing economy, which all of you here have had a hand in supporting.
During my tenure, I would love to see this vibrant economic partnership only continue to grow. We see tremendous potential to expand our connectivity in key areas like technology, innovation, agriculture, education and entrepreneurship, infrastructure, and perhaps most importantly energy.
On energy, I’d like to acknowledge the impressive job Bulgaria has done to adapt to the major shocks to international energy markets brought on by Russia’s invasion of Ukraine and its weaponization of gas supplies. With a focus on diversifying energy sources, including pivoting away from a dependence on Russian gas, Bulgaria has created a stable energy market that plays a significant role in the energy security of this entire region. The United States has been and will continue to be your committed partner in this effort, helping Bulgaria meet its energy needs and access diverse energy sources.
Earlier this month Bulgaria received its first LNG shipment – from an American supplier, I might note – via its new long-term transit agreement with Turkey. And I know the Bulgarian government is working to finalize long-term LNG supply contracts for transit through Greece and Turkey. Once those are signed, Bulgaria will for the foreseeable future have contracted zero molecules of Russian gas, assuring your complete natural gas diversification – and freedom from those who use energy supplies as a weapon. This is a remarkable turnaround, in a very very short period.
Bulgaria’s energy independence also contributes to the region’s energy independence. There are plans to continue this regional approach with the construction of the gas interconnector between Bulgaria and Serbia and the Alexandroupolis Floating Storage Regasification Unit.
It is impressive to see the positive impact on the Bulgarian economy as a result of working together with neighboring countries. In 2022, net electricity exports from Bulgaria to the region topped $3.4 billion. This is nearly 4% of GDP and almost three times higher than the previous year. And Bulgaria is committed to maintaining its leadership in regional power generation by planning many new projects, including more renewables and zero-carbon sources such as next generation nuclear.
These projects show how this region flourishes when neighboring countries work together.
The energy sector is just one example of the impact on the economy from collaboration. Other opportunities will be made available by entering the Eurozone and further integrating into European markets.
I understand that AmCham recently hosted a conference about what businesses can expect when Bulgaria joins the Eurozone. It is important that AmCham helps its members understand the positive impacts of Eurozone membership, and the opportunities arising from Bulgaria’s full integration into the EU. AmCham has stated that the adoption of the euro is a “natural and logical process of deepening and integrating into the EU in political and economic ways.” I couldn’t agree more. Euro adoption will make price comparisons easier between countries, which boosts competition between businesses, thereby benefiting consumers over the long term. It will lower interest rates and support price stability; make it easier, cheaper, and safer for businesses to buy and sell within the euro area and to trade with the rest of the world. It will improve economic stability and growth; and contribute to a better integrated and more efficient financial markets.
We, the United States, don’t have a vote in this. But as companies present here, both Bulgarian and European, you do. And I hope you agree with me that these are some serious benefits.
We can look to Croatia for a recent success story from joining the Eurozone and use those best practices to learn and prepare for the adoption of the euro. Though it has only been a few months since Croatia joined the Eurozone, it is looking forward to a stronger economy and a new level of economic resilience. This will have long-term positive effects on the Croatian economy – as it will for Bulgaria, once you join the Eurozone.
Similar to the positive effects of joining the Eurozone, expanding EU membership to include Bulgaria’s neighbors will contribute to greater political and economic security in this entire region. EU membership will create a framework more conducive for trade across the Balkans.
Membership for these countries also will bring access to EU funds and support programs for growth and development and unlock economic potential and collaboration opportunities for the entire region. The benefits and growth already experienced through collaboration in the energy sector can be replicated across other markets. For example, increased tourism will help spur economic growth and resilience, resulting in increased prosperity and opportunities for everyone.
Of course, there are other sectors of the economy where we see opportunities for growth and collaboration. We have seen substantial U.S. investment in the film industry and high-tech sectors – just to name two. Our commercial team at the Embassy is supporting universities exploring educational partnerships and U.S. companies pursuing investment opportunities in ICT infrastructure and cybersecurity to help make Bulgarian communications networks safer and more secure. And I’d like to hear from all of you where you see other opportunities on the way ahead.
Before I close, I’d like to acknowledge ongoing challenges in Bulgaria’s business climate that hamper economic growth and investment. Investors looking for new business opportunities and seek nations where rule of law institutions are strong and predictable. Investors gravitate toward countries that offer a level playing field for companies seeking market entry or market expansion. And investors want predictability – clear laws, and a swift and fair judicial system. I understand that AmCham Bulgaria has been at the forefront of urging rule of law reforms in Bulgaria. I commend you for your vision and purpose in seeking to make Bulgaria more attractive to international investors. We are committed to working with you and with the Bulgarian government to support a strong business climate that attracts investors from the United States, but also from around the world.
As we work together to promote a business climate that encourages innovation and growth, it is equally important to ensure that investments do not pose any threats to Bulgaria’s security, democratic values, or the integrity of its financial system. The European Commission has established a framework for foreign direct investment screening and called on member states to set up comprehensive investment screening mechanisms. I know AmCham is already working on identifying ways to support beneficial foreign direct investment while protecting Bulgaria’s critical infrastructure from destructive influence. This is another area in which we can collaborate to strengthen economic ties between our two countries.
This is a pivotal time for this region. We see enormous opportunities for energy independence, economic growth, and new collaborations with the West. I believe we will see continued forward momentum and strengthening of the commercial landscape in the next few years. Together, Bulgarian and U.S. investors will harness the enormous potential in this country, and in the region at large to create new opportunities, forge new partnerships, and create jobs and economic security for future generations. And I look forward to chipping in as best I can and being a part of it.
Thank you again for the kind invitation and the very warm welcome today. And now I will be happy to answer a few questions.
