Bulgarian Business – issue 3

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FIVE BULGARIAN REGIONS AMONG EU’S TEN POOREST IN 2013 BULGARIA WINS “MOST IMPRESSIVE BORROWER IN CEE” AWARD

25 MAY 2015 YEAR Issue 3 PAGE 5

Issue Highlights BULGARIA CELEBRATES NATIONAL DAY OF CULTURE AND SLAVIC SCRIPT Bulgarian President Rosen Plevneliev, Educational Minister Prof. Todor Tanev, as well as Sofia’s Mayor Yordanka Fandakova will be leading the mass procession in celebration of the National Day of Culture and Slavic Script.

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AVERAGE WAGE IN BULGARIA INCREASED 4-FOLD IN 2000-2015

PAGE 13 Bulgaria has won the top spot in the Most Impressive Borrower in Central & Eastern Europe category of GlobalCapital Bond Awards 2015...

The average wage in Bulgaria increased four times from BGN 225 to BGN 800 over the past 15 years. The energy sector boasts the highest average wage, at BGN 2260, which increased five times and a half in the period 2000-2015, according to reports of the Bulgarian National Radio.

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BULGARIA BACKS IDEA FOR GAS RING WITH ROMANIA, HUNGARY, SLOVAKIA Bulgaria, Hungary, Romania and Slovakia have signed a joint declaration supporting the idea to link their countries’ gas transmission systems, Hungary’s Foreign Minister Péter Szijjártó announced on Thursday evening. The idea is to build interconnections of existing gas supply infrastructure that would greatly increase the energy Continue on Page 12

25 May 2015

BG Business

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BULGARIAN FARMERS HIT BY RUSSIA SANCTIONS MAY EXPECT COMPENSATIONS TOTALING EUR 398 000

Fruit and vegetable growers in Bulgaria may expect compensations of up to EUR 398 000 from the EU for the losses incurred as a result of the sanctions imposed on Russia and the country’s response to that policy, according to Deputy Prime Minister Tomislav Donchev.

Donchev explained Friday in Parliament that the applications of Bulgarian agricultural producers had amounted to a total of EUR 1.4 B but the EU had only approved a sum that was around five times smaller.

Responding to a question of Volen Siderov, leader of nationalist party Ataka, Donchev made clear that the EU had not created a special financial instrument for supporting agr cultural producers who had suffered losses from the Russian embargo.

He added that Russia’s response to the policy had caused even greater losses by banning the import of certain types of goods from EU Member States, according to reports of dnevnik.bg.

Donchev informed that Bulgaria had exported to Russia goods worth EUR 527 M in 2014, or 2.4% of the country’s total export.

He said that in the first two months of 2015 Bulgaria’s exports as a whole had dropped by 7% on the year, while exports to Russia had fallen by 35%.

Donchev made clear that the rates of export were relatively low, at around EUR 77 M for 2013 and EUR 53 M in 2014.

Bulgaria’s Deputy Prime Minister noted that export of agricultural

products to Russia stood at USD 70 M for the entire 2013.

escalate soon so that the sanctions would be abolished.

Donchev expressed the hope that tensions in Ukraine would de-

Source : www.novinite.com

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25 May 2015

25 May 2015

25 May 2015

Bulgaria EU

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FIVE BULGARIAN REGIONS AMONG EU’S TEN POOREST IN 2013 eastern) (35%) and the Yugoiztochen (Southeastern) (37%) are also among the ten lowestperforming regions.

Five out of Bulgaria’s six regions are included in the ten poorest EU regions, according to Eurostat data.

According to a newly published report on GDP per capita in the EU in 2013, the French overseas department of Mayotte is the poorest EU region, with regional GDP per capita, expressed in terms of purchasing power standards, at 27% of the EU28 average.

Bulgaria’s Severozapaden (Northwestern) (30%), Severen tsentralen (North-central) (31%) and Yuzhen tsentralen (South – central) (32%) are next in the ranking of lowest performers.

Bulgaria’s Severoiztochen (North-

The only Bulgarian region out of the bottom ten ranking is Yugozapaden (Southwestern), where GDP per capita stands at 72% of the EU average in 2013, according to Eurostat, as cited by dnevnik.bg.

Inner London in the United Kingdom is the best-performing region with 325% of the EU average.

Other leading regions in the ranking of regional GDP per capita in 2013 include the Grand Duchy of Luxembourg (258%), Bruxelles/Brussel in Belgium (207%), Hamburg in Germany (195%), Groningen in the Netherlands (187%), Bratislava in Slovakia (184%), Stockholm in Sweden (179%), Île de France in France (175%), and Praha in the Czech Republic (173%).

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25 May 2015

25 May 2015

Culture

VIDEO PROMOTES BULGARIA'S PLOVDIV AS 2019 EUROPEAN CAPITAL OF CULTURE

A video, which will be broadcasted by more than 30 televisions, advertises the Bulgarian city of Plovdiv as the 2019 European Capital of Culture.

The video has a length of thirty seconds and depicts the citizens of Plovdiv doing arts, sports and their daily activities with some of the city's most popular places featured in the background Plovdiv was officially designated one of the 2019 European Capitals of Culture, together with the Italian city of Matera, by the EU Culture Ministers on Tuesday.

Plovdiv, which is one of the most ancient cities in Europe and the

world, will be the first Bulgarian city to hold the title, having been chosen in competition w i t h Ve l i k o Ta r n o v o , Va r n a a n d Sofia.

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BULGARIA CELEBRATES NATIONAL DAY OF CULTURE AND SLAVIC SCRIPT

The city is actively preparing for hosting the major cultural event, with the recently renovated musical fountains officially unveiled on Friday, daily Dnevnik reports.

The ceremony was attended by Culture Minister Vezhdi Rashidov and Regional Minister Lilyana Pavlova, who assured that Plovdiv will be allocated up to BGN 3M for public works until the end of the year.

The total cost of the renovation of the musical fountains in the Tsar Simeon garden was more than BGN 11 M, the majority of t h e f u n d s p rovided through the Regional Development Operational Programme.

Meanwhile, city-wide celebrations are taking place on Saturday to mark the official designation of Plovdiv as 2019 European Capital of Culture.

Bulgarian President Rosen Plevneliev, Educational Minister Prof.

Todor Tanev, as well as Sofia’s Mayor Yordanka Fandakova will be leading the mass procession in celebration of the National Day of Culture and Slavic Script.

The main events will be held at the monument of St. St. Cyril and Methodius’ Monument located right in front of the National Library in the center of Sofia. Honorable addresses and poetry recitals will be a traditional part of the ceremony.

After the official portion of the ceremony is held, people will get the chance to visit the free national exhibition at the National Library, dedicated to the 1200th anniversary of the birth of St. Methodius.

Representatives of the Bulgarian Academy of Sciences, the academic union to Sofia University as well as Chair of Bulgarian Parliament, Tsetska Tsacheva will also join the celebrations. Juraj Draxler, Slovakian Minister of Education will also be among the honorable guests.

Intercity traffic will be slightly changed on account of the celebrations, as parking will be b a n n e d o n t h e s t re e t s o f Oborishte, Shipka and Knyaz Aleksandar I. Source : www.novinite.com

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Diplomacy

POPE FRANCIS RECEIVES BULGARIAN PM, DELEGATION AT AUDIENCE IN VATICAN

Bulgarian Prime Minister Boyko Borisov and a delegation headed by him were received at an audience by Pope Francis in the Vatican on Saturday. The delegation is visiting the Vatican and Rome on Saturday and Sunday, on the occasion of May 24, when the Day of Bulgarian Education and Culture and Slavonic Script is celebrated.

The audience is traditional and it recognises the role played by Bulgaria in preserving and furthering the deeds of Saints Cyril and Methodius, who were declared as copatron saints of Europe by the Holy See. Borisov had a private conversation with Pope Francis in the Apostolic Palace in the Vatican, the government's press service

informs. The Bulgarian PM noted that the government recognised with deep respect the right of people to worship their religion, always supported the recognised denominations and relied on their responsible attitude towards causes, which were of significance for the society. Borisov presented to Pope Francis a gift of high spiritual value – a silver reliquary containing a stone from the resting place of Saint John of Rila. The Bulgarian PM also met with the Vatican's Secretary of State Cardinal Pietro Parolin, to whom he gifted two candlesticks, which are placed on the altar during service.

Source : www.novinite.com

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25 May 2015

Business

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AVERAGE WAGE IN BULGARIA INCREASED 4-FOLD IN 2000-2015

The average wage in Bulgaria increased four times from BGN 225 to BGN 800 over the past 15 years.

The energy sector boasts the highest average wage, at BGN 2260, which increased five times and a half in the period 20002015, according to reports of the Bulgarian National Radio.

According to employers in Bulgaria, the situation is paradoxical because the energy sector

registers losses of at least BGN 700 M a year.

High wages are also paid in the spheres of real estate and finance. At the bottom of the ranking are sectors such as the processing industry and agriculture.

There is a huge difference between the average income in Bulgaria’s capital and the other regions.

While in Sofia the average wage stands at BGN 1070, in Vidin, a

city located in Bulgaria’s poorest northwestern region, it amounts to BGN 516.

Bozhidar Danev, Executive Director of the Bulgarian Industrial Association (BIA), argued that it was only normal to witness migration towards the capital.

“We keep creating the economic g ro u n d s f o r p ro t e s t s a n d clashes in society,” he suggested.

Source : www.novinite.com

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Energy

25 May 2015

BULGARIA BACKS IDEA FOR GAS RING WITH ROMANIA, HUNGARY, SLOVAKIA connection and substantial bidirectional capacity of existing infrastructure”, according to a copy of the joint declaration published by euractiv.com.

The foreign ministers of the f o u r c o u n t r i e s a l s o e xpressed support for joint efforts to seek new sources and routes of diversification, adding the document “records political intent only.”

Although the name Eastring doesn’t appear in the joint declaration, the intention to interconnect the gas transmission systems of the four countries cleary refers to that project.

Slovakia has prposed Eastring as an option for diversifying gas supply infrastructure in Europe.

Bulgaria, Hungary, Romania and Slovakia have signed a joint declaration supporting the idea to link their countries’ gas transmission systems, Hungary’s Foreign Minister Péter Szijjár tó announced on Thursday evening.

The idea is to build interconnections of existing gas sup-

ply infrastructure that would greatly increase the energy security of all four countries, portfolio.hu quoted Szijjártó as saying Hungarian public television M1.

The signing took place in Latvia's capital Riga where the 4th Eastern Partnership summit has brought together top EU officials and leaders

of the member states and those of Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

The four foreign ministers said that given the need to ensure stable and uninterrupted natural gas supply to Central and East European region they are supporting “the implementation of inter-

Under the proposal, Eastring is to carry gas from the Slovak-Ukrainian border to the Bulgarian-Turkish border, opening opportunities for gas supplies to Bulgaria from Northern and Western Europe.

Eastring could also be conn e c t e d t o a p o t e n t ial gas hub in Turkey, enabling reverse-flow supplies from the Caspian basin, Iraq, Iran, and the Eastern Mediterranean.

Source : www.novinite.com

25 May 2015

Finance

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BULGARIA WINS “MOST IMPRESSIVE BORROWER IN CEE” AWARD Bulgaria has won the top spot in the Most Impressive Borrower in Central & Eastern Europe category of GlobalCapital Bond Awards 2015, the Finance Ministry in Sofia announced on Thursday.

The award went to Bulgaria in recognition of the successful placement of a EUR 3.1 B new benchmark triple-tranche bond comprising of seven-, 12- and 20-year maturities in March at the best possible market conditions, the Finance Ministry said in a statement.

Coupon on the bonds was at one of the lowest levels achieved by Bulgaria on global capital markets so far. The transaction drew strong investor interest and wide diversity of bids, which testify to Bulgaria’s good creditworthiness, stable macroeconomic fundamentals and exceptional consistency in financial stability and fiscal discipline policies.

GlobalCapital held its ninth annual Bond Dinner on Wednesday night at the Guildhall in the City of London. GlobalCapital is a leading news, opinion and data service for people and institutions involved in trading on the global capital markets.

More than 280 market professionals attended the event, at which GlobalCapital presented its 2015 Bond Awards to the most impressive individuals and market teams on both the borrowing and investment banking sides of the market. Like all GlobalCapital awards, these were not decided by GlobalCapital staff, but by a poll of market participants.

Source : www.novinite.com

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25 May 2015

Sport

25 May 2015

BULGARIA'S SESIL KARATANCHEVA REACHES LAST ROUND OF ROLAND GARROS QUALIFIERS

BULGARIAN FOOTBALL UNION TO DETERMINE FATE OF CSKA SOFIA The Executive Committee of the Bulgarian Football Union (BFS) will determine the fate of CSKA Sofia on Friday. The Licencing Committee of BFS revoked the licence of CSKA and three other teams from the A Group on Wednesday.

Bulgaria's tennis player Sesil Karatancheva reached the third and last round of the qualifications of the Roland Garros.

Karatancheva achieved this after defeating Maria Sanchez from the USA in the second round with 6:3, 6:7 (5), 6:1 on Thursday.

The Bulgarian was the first one to achieve a break, coming in the lead with 4:3 and kept the initiative until the end of the first set.

Karatancheva also started well the second set, establishing a 5:3 lead, but eventually she allowed her opponent to make a comeback and win the tie-break.

In the third set, the Bulgarian restored her confidence and conceded only a game to Sanchez.

Karatancheva, who defeated fellow Bulgarian Elitsa Kostova in the first round, will next face Tamira Paszek from Austria.

Paszek won the only encounter between them, which happened at the qualifications in Stuttgart in 2011.

At present CSKA has been deprived of licence for both participation in the domestic A Group and the domestic tournaments and the club has been placed under monitoring.

There is no opportunity for the team to regain its licence for the European tournaments as all deadlines have been missed.

However the team will appeal the revocation of the licence for the A Group, which could be restored only with the approval of the Executive Committee of BFS. In order to regain its licence, CSKA will have to repay some of its debts, especially those towards the National Revenue Agency (NAP) as well as to present a recovery programme.

At present the building of BFS is under 24hour guard, as there are fears that there might be a repetition of the 2013 attack, when CSKA fans stormed the premises.

There is a possibility for the present club to declare insolvency and a newly-established club to take over, with the new owners inheriting the old symbols and the emblem.

This has become an established practice in other Balkan countries, where the state managed to save prominent clubs in similarly troubled circumstances through employing dierent manoeuvres.

Source : www.novinite.com

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25 May 2015

Tourism

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MINISTER EXPECTS 5 % RISE IN FRENCH TOURISTS TO BULGARIA AFTER LOUVRE EXHIBITION

Minister Nikolina Angelkova said on Friday that a 5 % increase in the number of French tourists to Bulgaria was expected in the summer after the exhibition of Thracian treasures in the Louvre.

Angelkova stated this during the regular parliamentary control and added that an increase was also expected in the number of tourists from Poland, Turkey, Greece, Serbia, Macedonia and Austria.

According to her, the Foreign Ministry expressed readiness to issue the visas in the space of three days.

She was one of the nine ministers questioned during the parliamentary control, who had to answer to enquiries on the measures taken by the ministry to address the expected drop of Russian tourists. Angelkova reminded that the Foreign Ministry negotiated easing of the issue of visas to Russian tourists at the beginning of February.

Angelkova pointed to data, according to which Bulgaria was among the top ten of summer destinations chosen by Russians.

She revealed that the interest of Russian tourists towards Bulgarian visas was heightened and at present nineteen visa centres were functioning in Russia with additional personnel being posted to Bulgarian consulates.

The minister said that the forthcoming season would be full of challenges, but hoped that the expected drop of tourists would not materialise

as the Tourism Ministry had taken the necessary measures.

She pointed to information provided by Russian tour operators, which showed that no significant decrease of visitors choosing Bulgaria as their summer holiday destination was expected.

Angelkova assured that Bulgaria was doing everything possible to decrease the impact from the withdrawal of Russian tourists.

This included the Bulgarian participation at international stands, meetings and seminars and the advertisement of the country on popular international TV channels.

Source : www.novinite.com

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THE QATAR-BULGARIA BUSINESS FORUM

VISIT QBBF www.bulgarianbusiness.org.uk www.facebook.com/QatarBulgariaBusinessForum

The Qatar-Bulgaria Business Forum (QBBF) is a London based NGO

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25 May 2015

the unification of the e n v i ro nmental affairs' m e e tings in t h e G C C states a n d t h e G C C Framework c o nv e ntion on e n v ir o nmental protection and the inclusion of the environment meetings' documentation in the GCC website, the GCC environmental electronic website project, and the Gulf green initiative projects for the environment and sustainable development.

GCC UNDERSECRETARIES FOR ENVIRONMENTAL AFFAIRS' MEETING BEGINS IN DOHA

Doha, May 20 (QNA) - Doha hosted the 35th meeting of the undersecretaries responsible for environmental affairs in the Gulf Cooperation Council (GCC) at the Ritz Carlton Hotel today.

The two-day meeting discusses a number of issues, including cooperation with each of the United Nations Environment Program, Regional Office for West Asia, and the Regional Organization for the Protection of the Marine Environment and the World Bank, in addition to cooperation in the framework of the strategic dialogue with Turkey and Jordan and Morocco.

The meeting addresses a study to establish the GCC Environmental Monitoring Center and the working group in charge of studying the developments of the United Nations Convention on Climate Change, the Kyoto Protocol, the Vienna Convention for the Protection of the Ozone Layer, and the Montreal Protocol on Substances that Deplete the Ozone Layer as well as the GCC environment and wildlife award.

Other topics for discussions include GCC network for land degradation studies, Sultan Qaboos Prize for environmental and human affairs, promotion of environmental education in school curricula in GCC countries as well as

The meeting was inaugurated by assistant undersecretary of the Environment Ministry for Environmental Affairs Ahmed Mohammed Al Sada.

In his remarks, Al Sada said that the meeting comes few days before the celebration of the 34th anniversary of the establishment of the Cooperation Council for the Arab States of the Gulf, which one of its achievements is the patronage of Their Majesties and Highnesses the leaders of the Council to the process of joint environmental action, and their wise directives to protect the environment in the GCC countries and to maintain the sustainability of natural resources in order to meet the aspirations of the peoples in achieving sustainable development and promoting economic and social progress and stability.

He outlined the importance of issues included in the meeting's agenda, calling for exploring and exchanging views on them in

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order to come out with effective recommendations that will be referred to the environment ministers at their meeting in Qatar in October.

GCC Assistant Secretary General for Economic and Development Affairs at the Council's General Secretariat Abdullah bin Joma AlShibli extended his thanks and appreciations to HH the Emir Sheikh Tamim bin Hamad AlThani and other GCC leaders for their continued support to the progress of GCC joint action.

Al-Shibli deemed the meeting as a good opportunity to review and evaluate the progress both at the international and regional levels and to unify visions and attitudes so as to push the process of joint environmental work forward.

He stressed the need to strengthen coordination and cooperation between the environmental authorities and other relevant agencies in the GCC countries, as well as cooperation with

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regional and international organizations to develop solutions and appropriate plans and programs to overcome the environmental risks, calling for the development of institutions, legislation and policies to protect the environment, advancement of the role of government and private bodies and support of environmental media, in addition to conducting studies and specialized research to figure out the implications of environmental problems in the region to protect the Gulf environment.

At the meeting, the Gulf Petrochemical and Chemicals Union presented a working paper on the impact of climate change on the oil and gas sector, disaster reduction, and guiding environmental regulations and laws within the framework of the Gulf Cooperation Council. (END) Source : www.qna.org.qa

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UK Business

25 May 2015

MILIBAND ATTACKS 'DODGY' PM IN HSBC DONOR ROW

David Cameron has promised a referendum on whether Britain should remain in the European Union by the end of 2017. Here is a summary of the key arguments for and against British membership.

Are there any viable options for Britain leaving the EU? If Britain votes to leave the EU, it will have to negotiate a new trading relationship with what would now be a 27 member organisation, to allow British firms to sell goods and services to EU countries without being hit by excessive tariffs and other restrictions.

Better off out: Britain could negotiate an "amicable divorce", but retain strong trading links with EU nations, say those campaigning for Britain's exit.

There are several potential scenarios: • The Norwegian model: Britain leaves the EU and joins the European Economic Area, giving it access to the single market, with the exception of some financial services, but freeing it from EU rules on agriculture, fisheries, justice and home affairs • The Swiss model: Britain emulates Switzerland, which is not a member of the EU but negotiates trade treaties on a sector-by-sector basis • The Turkish model: The UK could enter into a customs union with the EU, allowing access to the free market in manufactured goods but not financial services • The UK could seek to negotiate a comprehensive Free Trade Agreement with the EU, similar to the Swiss model but with better access for financial services and more say over how rules and standards are implemented

• The UK could make a clean break with the EU, relying on its membership of the World Trade Organisation as a basis for trade Better off in: An "amicable divorce" is a pipe dream, pro-EU campaigners argue. France, Germany and other leading EU nations would never allow Britain a "pick and mix" approach to the bloc's rules. Norway and Switzerland have to abide by many EU rules without any influence over how they are formed. Negotiating a comprehensive free trade agreement could take years and have an uncertain outcome. And if Britain went for a completely clean break with the EU its exports would be subject to tariffs and would still have to meet EU production standards, harming the competitiveness of British business.

What would be the impact on British jobs?

The run-up to the EU referendum is likely to be dominated by competing claims about how many millions of jobs will be lost or gained by Britain's exit. All such claims come with a health warning.

Coming up with a precise figure is difficult as there is no way of knowing if threats by foreign companies to scale back their operations in the UK would come to pass or, indeed, how many jobs would be created by the reshaped economy that might emerge in the wake of an exit.

Better off out: There would be a jobs boom as firms are freed from EU regulations and red tape, say those arguing for an exit, with small- and medium-sized companies who don't trade with the EU benefiting the most. In its recent paper, the EU Jobs Myth, the free market Institute for Economic Affairs seeks to debunk the claim that 3-4 million jobs would be lost if Britain left. "Jobs are associated with trade, not membership of a political union, and there is little evidence to suggest that trade would substantially fall between British businesses and European consumers in

the event the UK was outside the EU," it argues.

"The UK labour market is incredibly dynamic, and would adapt quickly to changed relationships with the EU." Better off in: Millions of jobs would be lost as global manufacturers moved to lower-cost EU countries. Britain's large, foreign-owned car industry would be particularly at risk. "The attractiveness of the UK as a place to invest and do automotive business is clearly underpinned by the UK's influential membership of the EU," said a KPMG report on the car industry last year. The financial services sector, which employs about 2.1 million people in the UK, also has concerns about a British exit. "The success of the UK financial services industry is to a large extent built on EU Internal Market legislation. To abandon this for some untried, unknown and unpredictable alternative would carry very significant risks," said global law firm Clifford Chance in a report by think tank TheCityUK last year.

What about the impact on the economy as a whole?

Much would depend on the trade deals Britain managed to negotiate with the EU and rest of the world after its exit.

The best-case scenario, according to think tank Open Europe, is that the UK would be better off by 1.6% of GDP a year by 2030. That is assuming the UK carried out widespread deregulation after its exit and managed to strike favourable trade deals. The think tank adds: "A far more realistic range is between a 0.8% permanent loss to GDP in 2030 and a 0.6% permanent gain in GDP in 2030, in scenarios where Britain mixes policy approaches".

The Centre for Economic Performance, at the London School of Economics, says the worstcase scenario is a 6.3% to 9.5% reduction in

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GDP, "a loss of a similar size to that resulting from the global financial crisis of 2008/09". The best case, according to their analysis, is a loss of 2.2% of GDP. What about immigration?

Better off out: Britain would regain full control of its borders. UKIP wants to see a work permit system introduced, so that EU nationals would face the same visa restrictions as those from outside the EU, which it says would reduce population growth from current levels of 298,000 a year to about 50,000. This would create job opportunities for British workers and boost wages, as well as easing pressure on schools, hospitals and other public services.

Better off in: Britain might have to agree to allow free movement of EU migrants as the price of being allowed access to the free market. In any case, immigration from the rest of the EU has been good for Britain's economy. The UK's growth forecasts are based, in part, on continued high levels of net migration. The independent Office for Budget Responsibility says the economy relies on migrant labour and taxes paid by immigrants to keep funding public services.

What would be the effect on trade?

Better off out: The EU is not as important to British trade as it used to be, and continuing turmoil in the eurozone will make it even less so. Even if Britain did not manage to negotiate a free trade deal with the EU it would not be as disastrous as EU-enthusiasts claim, argues economist Roger Bootle in his book The Trouble with Europe: "It would place the UK in the same position as the US is currently in, along with India, China and Japan, all of which manage to export to the EU relatively easily." The UK would be free to establish bilateral trade agreements with fast-growing export markets such as China, Singapore, Brazil, Russia and India through the World Trade Organisation.

Better off in: The EU is the UK's main trading partner, worth more than £400bn a year, or 52% of the total trade in goods and services. Complete withdrawal from the EU would see trade barriers erected, with car exports to the EU, for example, facing a 15% tariff and imports a tariff of 10%. "The idea that the UK would be freer

UK Business outside the EU is based on a series of misconceptions, that a medium-sized, open economy could hold sway in an increasingly fractured trading system dominated by the US, the EU and China; that the EU makes it harder for Britain to penetrate emerging markets; and that foreign capital would be more attracted to Britain's economy if it were no longer part of the single market," the pro-EU Centre for European Reform said in a recent report.

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als that make tax avoidance in Britain central to their business strategy," argued the proEuropean The Observer newspaper in an editorial.

Would Britain's legal system, democratic institutions and law-making process change?

Would the UK's influence in the world change?

Better off out: The UK would remain a key part of Nato and the UN Security Council and a nuclear power, with a powerful global voice in its own right. The Eurosceptic Bruges Group wants an end to the "discredited" principle that Britain acts as a transatlantic bridge between the US and Europe, saying the country should make selfreliance its guiding principle.

Better off in: Stripped of influence in Brussels, Berlin and Paris, Britain would find itself increasingly ignored by Washington and sidelined on big transnational issues such as the environment, security and trade. America and other allies want Britain to remain in the EU. The UK risks becoming a maverick, isolated state if it leaves.

What would happen to Britons working in Europe, and EU citizens working in the UK? Better off out: Britain would gain full control of its own borders, with migration in and out of the country regulated solely by British law. It would be more difficult for EU citizens to move to the UK, although those already living here are unlikely to be removed.

Better off in: A lot would depend on what kind of deal was reached with the other EU nations. Britons may have to apply for visas to enter EU countries and those already living there may face integration rules, such as proving they can speak the language before gaining long-term residency rights. There would also be uncertainty for many EU workers now paying taxes in the UK - what benefits, if any, would they be entitled to?

Better off out: It would be a major shot in the arm for British democracy as the Westminster parliament regained its sovereignty and reconnected with voters. The country would be free from the European Arrest Warrant and other law and order measures.

Better off in: Britons benefit from EU employment laws and social protections, which would be stripped away. Withdrawal from the European Arrest Warrant could mean delays for the UK in extraditing suspects from other European countries; and the UK already has some opt-outs from EU labour law, including the Working Time Directive.

Source : www.bbc.com

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Would taxes change?

Better off out: The EU has limited power over tax, which is largely a matter for national governments. The exception is VAT, which has bands agreed at the EU level. Outside the EU, the UK would potentially have more flexibility.

Better off in: "Tax avoidance and evasion will reach crippling levels as our economy becomes increasingly wholly owned by foreign multination-

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