27.04.2021
HOW A CRAZY IDEA TURNED A ROMANIAN INTO A BILLIONAIRE
Daniel Dinesh fought a tough battle with the US way of life after leaving his native Romania in 2001 to work for Microsoft. But later the difficulties became the basis for the accumulation of one of the greatest wealth in the world.
The software programmer returned home in 2005 to start the business now known as UiPath Inc. - a process automation platform that made its official stock market debut last week, raising $ 1.3 billion through an initial public offering in the United States, Bloomberg writes.
Dinesh, the company's chief executive, controls a stake in the business worth more than $ 6 billion. "For someone like me who arrives in the United States from Europe at the age of twenty, it was a great challenge to adapt to the United States, even if my professional experience at Microsoft was great," Dinesh, 49, said. during last year's Montgomery Summit. As a result, "I had a crazy idea to go back and start a company," he says.
UiPath, valued at $ 7 billion in 2019, currently has a market capitalization of about $ 30 billion after its shares reached a price of $ 56 per share, which is above market expectations.
This puts Dinesh among the 500 richest people in the world, according to the Bloomberg Billionaires Index. "Starting a company in a small place without a market has its hidden advantages: it makes you think globally from day one," Dinesh said in a letter to the documents accompanying the stock exchange listing.
His company has been preparing to go public since early 2020. UiPath's software can perform a number of low-skilled tasks that businesses have outsourced to low-wage countries such as India and the Philippines in the past.
Known as robotic process automation, the technology uses repetitive input to perform specific tasks. The software is used in hospitals and healthcare projects in the battle with COVID-19, according to the UiPath website.
Dinesh, who studied mathematics and computer science at the University of Bucharest, grew up in Romania under communist dictator Nicolae Ceausescu. Initially, his company was called DeskOver, but in 2015 he changed his name to UiPath. The first steps in the business are managed by an apartment in the Romanian capital, and in 2017 the headquarters moved to New York.
Financing
UiPath is raising $ 750 million in funding in a round led by Alkeon Capital and Coatue, which raises the company's valuation to $ 35 billion, according to a February statement. Altimeter Capital Management, Dragoneer, IVP, Sequoia Capital, Tiger Global Management and funds advised by T. Rowe Price Associates are the other investors.
Dinesh owns all Class B shares, which corresponds to 35 votes to one vote for each Class A share. He continues to manage UiPath after the initial public offering, selling $ 75 million worth of shares.
"You have to become a public company at some point to allow your employees to get more liquidity by giving them options to buy shares," Dinesh said in an interview with Bloomberg last year. "We almost got there."
27.04.2021
FORD IS INVESTING $ 300 MILLION IN ITS PLANT IN ROMANIA
US car giant Ford Motor Company will invest $ 300m (248m euros) in a new light truck project at its plant in Craiova, Romania. Production will start in 2023, and a year later the construction of a fully electric version of the cars will begin, the company said, quoted by seenews.com. This will be Ford's first fully electric car to be produced in Romania.
"Our plan to build this new van in Romania reflects both our fruitful and growing partnership with local suppliers and the community, and the success of the entire Ford Craiova team," said Ford of Europe President Stuart Rowley.
"With the introduction of the fully electric version in 2024, Craiova will become our fourth plant in Europe to produce fully electric vehicles. The investment in Craiova comes against the background of other announced investments in the Ford Electrified Vehicle Center in Cologne (Germany) and at the Kocaeli plant of Ford Otosan in Turkey and sends a clear signal about our promise to offer European consumers zero-emission trucks," says Rowley.
The new van, which will start production in 2023, will be equipped with some of Ford's most advanced petrol and diesel engines manufactured at the Ford Dagenham plant in the UK. The car will be manufactured by Ford Halewood Transmissions Limited, which is also based in the UK.
The exact date from which production will start, as well as other additional details will be revealed before the official start of the activity, Ford added. According to Rowley, the new investment demonstrates the company's hopes that the Romanian government will deliver all the key improvements promised to support the region's competitive manufacturing environment, including transport infrastructure.
In February, Ford said it would offer a full range of electric and hybrid trucks in Europe by 2024. The company expects by 2030 2/3 of all truck sales to be electric or hybrid models.
Ford entered Romania in March 2008, when it completed the acquisition of a 72.4% stake in Automobile Craiova, owner of carmaker and distributor Daewoo Automobile Romania. Since then, Ford has invested more than 2 billion euros in the Craiova plant, creating more than 6,300 jobs.
The company currently produces the Puma and EcoSport models, as well as the EcoBoost 1.0 engine in its Romanian power. In July 2020, Ford announced a $ 30 million investment in a new line at the Craiova plant to produce a wide range of components that are powered by the company's other facilities in Europe.
27.04.2021
NOT ONLY EXCELLENT COMPANIES CAN GET A BANK LOAN
Tourism, transport, trade, the sudden pandemic left its lasting mark on business both around the world and in our country. Over the past year, we have witnessed various measures to help the sectors affected by the crisis - a moratorium on loan payments and various government programs. The fact is, however, that the end of the "credit holiday" has come, and social and economic measures will not last long.
What next?
To answer the question of what follows for the businesses concerned, we must first look at the scale of the damage. According to a study by the Bulgarian Chamber of Commerce, conducted among businesses at the end of last year, production volumes decreased by over 60%, sales and turnover also shrank, but by more than 70%, foreign markets collapsed by nearly 45% and labor places are half less. A drastic decline is also reported in terms of investments and new products.
At the same time, liabilities to financial institutions, counterparties, the budget and staff increased by about a third.
Part of the solution?
The state, represented by the Bulgarian Development Bank, has developed a portfolio guarantee program to support micro, small, medium and large enterprises affected by the COVID-19 pandemic, which can reach businesses through banks. A few days ago UniCredit Bulbank signed an agreement to extend the term of the program.
"The companies with which we most often conclude deals are from the sectors: freight road transport, restaurants and bars, construction, trade in cars and vans, tour operators, retailers and companies for urban and suburban passenger transport," they told Dir. .bg from UniCredit Bulbank. The experts stressed that these are the sectors with which their bank has concluded the most contracts, which does not imply that these sectors are the most common in the entire banking sector.
Who can apply?
Unlike the traditional bank loan, which is granted to companies in good financial condition, this scheme can benefit companies that are experiencing financial difficulties after December 31, 2019, due to the pandemic of COVID-19.
Applicants must meet at least one of the following requirements:
However, it is important that the applicants have regularly serviced their loans without falling into arrears for more than 90 days in 2019.
Who can get how much?
As it has already become clear, micro, small and medium enterprises can benefit from the program - with a staff of up to 249 people, assets of up to BGN 84 million and an annual turnover of up to BGN 97.5 million. Companies that fall into this category and meet the requirements can receive up to BGN 1 million. And recently - from twice the credit to 2 million. BGN can also benefit large enterprises.
As the program is guaranteed by the state, the business can receive a loan from UniCredit Bulbank with relaxed collateral requirements - coverage of no more than 50% of the amount of requested financing. Grace periods are allowed for both interest and principal.
In addition, the repayment period of these loans has an extended period - up to 6 years, but not later than June 30, 2027.
26.04.2021
HOW MUCH IS PAID IF WE WORK ON HOLIDAY
Due to the coincidence of May Day with Holy Saturday, the Easter weekend in 2021 will be one day longer. According to the Labor Code, when an official holiday, such as May 1, coincides with a Saturday or Sunday, the first working day or first working days after them are non-working.
However, when working in non-working May 4, the work is paid with an increase only if it is overtime, as the increase is 75%. This was announced by the press center of the Executive Agency "General Labor Inspectorate".
A minimum double wage is paid to all employees on official holidays, such as the four days for celebrating Easter - from April 30 (Good Friday) to May 3 (Monday). If the work on a holiday is also overtime, then the wage reaches four times the amount, as it is also paid with a 100% increase.
The work on an official holiday, on a day off or in absentia is always extraordinary in case of daytime reporting of working hours and in case of irregular working hours. There is no overtime work on holidays and weekends, laid down on a schedule with the introduction of summary reporting of working hours. The payment of overtime work in this regime of accounting for working time is at the end of the period for which it was introduced, with a 50% increase.
The schedule for summary reporting of working hours must be approved by name for the entire period for which it is introduced. When overtime work is required, it must be assigned by an order issued in advance by the employer.
26.04.2021
WHO ARE THE MOST DESIRED EMPLOYERS IN BULGARIA FOR 2021?
For another year, the IT sector is emerging as one of the most preferred by employees in pandemic and more uncertain times, after the first two places in the annual independent survey Employer of Choice, which is exclusively available to Investor.bg, are occupied by companies from sector. At the same time, however, the TOP 5 is complemented by retail and consumer goods companies.
In 2021, the winner of 2020 - VMWare - will lead the prestigious ranking. The software company climbed from 3rd place in 2019 to the top during the pandemic last year and in a state of emergency retains its position as a leader in image as an employer in Bulgaria.
In second place is another software giant SAP Labs Bulgaria (climbing from 3rd position in 2020). Top 3 surprisingly fills last year's number 7 - Lidl Bulgaria.
Perhaps surprisingly, the top five is complemented by consumer goods companies - Nestle Bulgaria climbed strongly from 20th place a year ago to 4th position now, and in fifth place is Coca-Cola Bulgaria, after moving 3 places forward.
"The purpose of the study is to establish the image as an employer of a company - what are the strengths that attract employees and where it lags behind. In the highly competitive labor market in our country, this is an element in business that cannot be underestimated and immeasurable. Huge human resources management and recruitment budgets depend on this data.” With these words describes the study Georgi Georgiev, a representative of the organizer for Bulgaria - ToTheTop Agency.
The top ten also includes Lufthansa Technik Sofia, Hewlett Packard Enterprise, Coca-Cola Hellenic, Coca-Cola European Partners Services Bulgaria and IBM Bulgaria LTD.
The Employer of Choice study is based on a sophisticated algorithm based on an established model used by the father of employer brand science, Simon Burrow, to measure a company's employer brand, and uses this as a starting point to improve its performance. The algorithm examines more than 50 brand characteristics, communication channels, alternative choice of the candidate and more, and more to determine the sum of points and rank "Top 50 of the most desirable employers."
More than 13,000 people from all over Bulgaria voted in the survey. The survey contains over 50 questions and was conducted in the period March - April 2021 online.
It is interesting to note that just over 58% of respondents do not consider leaving their current employer, and less than 7.78% have decided to do so after 6 months. The share of the hesitant is also high - 25.16%.
"Yes, there are reasons for optimism! We have noticed a polarization in the behavior of companies in the last year - some have stopped even their timid attempts to work on their employer image. They just froze, waiting or cutting resources, shifting their attention to business urgency and day-to-day tasks. However, others have now decided to reap the dividends and solve business cases through human resources - use the moment to improve the quality of human resources, fill "holes" at a lower cost of selection or expand their business. Great moment for optimization and many companies take advantage. We expect 2021 to be a record number of individual reports prepared for companies by Employer of Choice", Georgi Georgiev explains.
Who were last year's winners see here!
And here are the most desired employers by Bulgarian students for 2020.
26.04.2021
BOSS HELPLESS IN THE AFTERMATH OF THE PANDEMIC
The pandemic, physical isolation and the precarious economy have contributed to the decline in the mental well-being of thousands of workers. This shows a study by the Adecco Group.
The majority of company leaders said they felt unprepared to talk about the mental well-being of their employees. 54% of them say that it is difficult to provide effective advice to their people about their mental well-being during a pandemic.
At the same time, half of managers admit that it is difficult to judge how their employees feel. On the other hand, the survey shows that 28% of employees say that their mental health deteriorated during the pandemic. The lack of effective tools in management teams to solve this problem is further exacerbated by the expectations of employees, 80% of whom believe that their employer is responsible for providing a better working world.
This requires a greater focus on improving corporate welfare programs. For decades, many companies have invested primarily in services or benefits based on amenities such as gyms and ping pong tables. However, with the changed work environment, these programs are not applicable and lack the key elements necessary for long-term success.
Therefore, experts suggest that companies consider a new holistic model that is sufficiently sustainable and long-term. It provides a holistic approach to employee well-being that combines both top-down management and bottom-up feedback.
The holistic approach includes 4 elements: mental and physical well-being, social aspect (the ability of employees to connect, engage with others, to join) and last but not least the goal of the company's existence based on common values and principles that serve as employee motivation.
When these 4 elements are considered in their entirety, the business can reach solutions tailored to the unique needs of the organization. For example, a company that faces a lack of employee engagement may find that the basic need for teams is better support.
To achieve this, the company can implement solutions such as:
Organizing days dedicated to the development of certain skills in employees;
New communication channels for sharing news and social invitations;
New structured promotion program related to mentoring or mental well-being;
New roles in the company's team to focus on employee engagement and well-being;
New technologies and platforms to help increase team well-being.
23.04.2021
LABOR RIGHTS INFORMATION EVENT IN AUSTRIA TO BE HELD ON APRIL 28
How can I work in Austria? Which institution can I turn to if my labor and social rights are violated? What do I need to do to register for pension and health insurance? What rules should I follow? Workers and those wishing to work in Austria will receive answers to these questions and other useful tips during an online information event on the Zoom platform on April 28 at 10.30. The forum is organized by the Office of Labor and Social Affairs at the Bulgarian Embassy in Vienna.
During the event, experts from the General Labor Inspectorate, the Employment Agency, the National Social Security Institute and their Austrian partners will tell who is who in the protection of employees and which provisions must be taken into account in Austria.
The experts will inform those interested about the opportunities for posting, finding a job through an intermediary, using the opportunities provided by EURES. Useful advice will be given on the basic rules that those wishing to start working abroad must comply with when leaving Bulgaria. The participants in the event will find out if and how they are registered in health or pension insurance and if they have insurance against an accident at work, what is the procedure if such registration is missing and how to file a report.
Representatives of the National Social Security Institute will explain what documents must be submitted upon return to Bulgaria with a view to granting and paying short-term benefits and state social security benefits.
To participate in the event you need to request an e-mail socialau@embassybulgaria.at. More information about the meeting can be found on the Facebook page of the event -
https://www.facebook.com/events/3776999799003080/.
During the event, translation from German into Bulgarian and back was provided.
23.04.2021
70% OF BULGARIANS FIND IT DIFFICULT TO FIND A JOB
About 70% of Bulgarians believe that it is becoming more and more difficult for a person to find and start a job, and one third point out the existence of prejudices.
The two age groups for which this is most valid are the inexperienced staff under the age of 24 and people over 45-54 (53.2%). This shows a quantitative study of the marketing agency Blue Point, conducted in January 2021 by order of TELUS International Bulgaria.
The second person, when asked, shared that he had heard about the existence of prejudices during the job interview.
At the same time, almost 30% of the respondents were required to have a foreign affiliation, ethnicity, sexual orientation or other reasons.
Tolerance towards "different people" at the national level is still not so widespread - only 23% believe that Bulgarians are extremely tolerant, while 49.5% say that society falls into the category of "rather intolerant". As for the number of tolerant employees in our country, 34% share the view that they are not open to the differences in the candidates for the job.
The survey also tracks what users find to be unacceptable questions during a job interview. Sexual orientation - 73.3%, and skin color - 69.3%, followed by religious affiliation - 57%, plans for children - 55%, and ethnic affiliation - 46%.
The feeling that we are still beginning to mature as a society is clearly evident from the fact that all of the respondents declare that they fully accept their colleagues who are much younger or older, with different political beliefs, style of dress, religious affiliation.
In addition to the national level, the topics of prejudice and acceptance have been studied by employees of TELUS International Bulgaria. According to an anonymous survey, over 83% of the company's employees say that no one has ever experienced intolerance.
This is supported by the fact that 98.7% of them believe that they fall into the category of "extremely tolerant" and "more tolerant" employers on the Bulgarian market.
22.04.2021
ENTREPRENEURSHIP: ROMANIAN STARTUP UIPATH HAS ACHIEVED A $ 29 BILLION ESTIMATE ON WALL STREET
Romania-based UiPath managed to make its largest initial public offering (IPO) on Wednesday to a US-based startup. The software company was listed at an estimated $ 29 billion.
In the last round of private funding, UiPath was even valued at $ 35 billion. Banks may have agreed on a lower market capitalization target as interest in cloud services on stock exchanges has recently waned.
Thus, a rapid rise in the share price was expected, and it actually happened: in a short period of time, the shares rose by 20 percent and even left the trade with a plus of 23.2 percent. In addition to CEO and co-founder Daniel Dinesh, German financier Earlybird in particular can see the IPO as a huge success.
UiPath is a software robot specialist. Technology automates the repetitive activities of people on the computer - so corporations save labor and money. According to analyst firm Gartner, the market is expected to reach $ 1.89 billion in 2021 and continue to grow at double-digit percentages until 2024.
Banks, retailers and the healthcare sector use UiPath software today. In the case of insurance companies, this software can automatically process claims. The company managed to increase its revenue last year by 81 percent to 607.6 million dollars, while reducing its net loss by 80 percent to 92.4 million dollars.
But just a few years ago, it was not clear when so-called robotic process automation (RPA) would be needed - and who could become the market leader. The fact that a small company from Bucharest succeeds shows the complexity of the venture capital business in its new global scale.
The idea is that a digital army of bots can handle repetitive, time-consuming tasks for a fraction of the time and cost, allowing companies to connect different systems and freeing employees from tedious activities and resources to perform more. significant, strategic work.
Companies are increasingly digitizing operations, but in silos, Rich Won, a partner in the Silicon Valley venture capital firm Accel, an early investor in UiPath, told WSJ. The real efficiency, he said, comes from companies that can connect these digital islands.
UiPath estimates the current market opportunity at over $ 60 billion. "And we're in the first or second stage of this process," Won said.
UiPath CEO Daniel Dinesh, who is one of the company's founders, said that "Covid has only accelerated the digital transformation, and automation is the cornerstone of digital transformation services."
Earlybird founder Hendrik Brandis has been telling an anecdote from December 2015 in recent months.
UiPath boss Daniel Dinesh personally presents his startup. "I'm glad you only invested a million dollars," said an investor in Brandis's trust fund. This company was about to close. No one understood "what this man was doing."
Now this million from Earlybird has multiplied at least 1813 times according to Handelsblatt's calculations. Return dream.
Startups in Romania are self-financing - at least initially
In retrospect, trends in venture capital businesses often seem difficult to predict. Brandis also admits that only his colleagues were able to make him understand: UiPath software does the stupid and repetitive office work that industrial robots do in the factory. The mathematician Daniel Dinesh, however, expresses this in a much more technical way.
Under the rules of the US Securities and Exchange Commission, investors are not allowed to give interviews during an IPO. That's why a number of media talked to them earlier - about the beginning of UiPath.
"Daniel was not a great presenter," Dan Lupu, a Romanian and one of Earlybird's four Digital East partners investing in Eastern Europe and Turkey with an independent fund, told Germany's Handelsblatt. He was largely responsible for the venture capital firm still investing in UiPath.
In Germany, many founders see themselves as sellers. In many segments, it all revolves around the question of who can convince investors. In Romania, on the other hand, start-ups are usually self-financing. "The whole region is suffering from a chronic lack of institutional capital," Lupu said. If you want to finance, you need to look for someone: he found out about UiPath in 2014 through an acquaintance.
The company started as an outsourcing service provider in 2005 under the name Deskover. Then Daniel Dinesh thought about the topic of process automation. "When we first met for coffee, ten people were sitting close together in the office in an apartment building," Lupu said. "There was no product, no commercial model - just a very simple demonstration."
14 months until the founder and investors reach an agreement
The investor knew that such ideas were born several times - without much success. But he sees potential. The big technology companies had not yet shown interest in the market. He believed that competitors with an annual turnover of ten million dollars could be overtaken by a serious infusion of capital.
"Oddly enough, we were the only option for UiPath," says Lupu. "But they do not fully trust the system for accepting investor money. Why do investors want to give us money? How do they want to help us?"
It takes 14 months until the founder and the investor reach an agreement. Lupu was also looking for co-investors, with only one in 15 venture capital firms wanting to participate. Then Credo Ventures from the Czech Republic persuaded Seedcamp from London to join.
One of the first agreements between investor and founder: UiPath has to move to New York. The Romanian domestic market did not provide an appropriate test area for the products. Global business could not have developed better for UiPath: "Immediately after our investment, the market gained momentum and there was a real influx of companies that wanted to test and implement RPA technology," says Lupu. International customers have brought the breakthrough - from Japan, from India, especially from the United States.
The fact that the famous American fund Accel found out about UiPath at an early stage and according to the stock exchange prospectus holds most of the shares (along with Earlybird) is related to a Romanian. Accel's then-partner Luciana Lixandro decided to visit his homeland to look for key people in the venture capital business there.
Until then, she had never been involved in the Romanian scene, Alexandru told Handelsblatt. "I asked around and someone introduced me to Dan Lupu." That's how she first heard about process automation - coffee. A few months later, in early 2017, Accel led the first major round of UiPath funding (Series A) for $ 30 million.
In September 2018, UiPath wrote on Twitter that it now has annual recurring revenues of one hundred million dollars. This was the year the startup became a unicorn. That's what startups with a valuation of one billion dollars are called. At the end of 2019, UiPath even became the first in Europe "Decacorn" with a valuation of ten billion dollars.
Apart from the lack of profit, one of the biggest risks is the growing competition from the so-called No-Code companies, which are similar to UiPath.
Eastern Europe benefits from a strong education in mathematics, information technology and engineering
In retrospect, Luciana Lixandrou believes that two things were decisive. First, the small company from Romania has developed a special image for itself. "On my first visit, I was wrong to say, 'Wow, it would be so great to invest in a Romanian company.'" Someone replied, "We're in Romania, but we're a Silicon Valley company," said the manager, who now works for a competitor of Accel - Sequoia.
Second, large international companies quickly realized that the further development of UiPath could transform their own business model. She reports on an early-day client event where experienced managers said to themselves, "If this works on a large scale, we will be able to run our business very differently."
Luck is part of the venture capital business. However, the Romanian startup miracle is not a product of chance. Rather, the region is underestimated. Under Soviet influence, the education system took shape in scientific and technical dominance, which was an advantage for Eastern Europe, according to Earlybird. In the spring, the venture capitalist launched his second fund, Digital East, with a total of 200 million euros.
"To develop innovative, destructive technologies, you no longer need great infrastructure, you need smart people," says Hendrik Brandis. The venture capital industry has not yet fully understood this.
According to Luciana Alexandrou, UiPath founder Dinesh is now a role model for many founders, especially outside the big cities. He once said of the start of his startup: "I didn't even know that the idea for startups was: borrowing money from investors, validating ideas, developing a product to enter the market, and only then a strategy."
IPO: how to calculate the profit of investors
To understand how IPO proceeds will pay off for investors, industry-specific assumptions must be used in addition to publicly available data on amounts and funding estimates. Accordingly, the circle of Seed investors should have acquired about 20 percent of UiPath in 2015, and Earlybird should hold 12.5 percent.
As a result, the effects of dilution must be taken into account. Any capital increase in which the investor does not invest at least in the ratio in which he has participated so far reduces the share. This option quickly runs out for a small fund.
If the UiPath case is calculated, the share of first investors would be halved by a maximum dilution by the time the company goes public. The multiplication factor for these investments is 1813. However, through subsequent investments totaling $ 9 million, Earlybird probably retained a stake of just under ten percent and amassed a total of $ 2.9 billion. During the IPO, however, the company will sell only five percent of its own shares - an indication that it expects some increase in value.
These calculations ignore the fact that Earlybird and other investors may have already sold very small amounts of shares at an early stage to reduce their risk.
21.04.2021
MOODY'S: BULGARIA MAY BE AMONG THE WINNING COUNTRIES FROM EU FUNDS
Croatia, Bulgaria and Romania can add the most significant growth to their GDP compared to other EU members from Eastern Europe - by 1.0%, 1.0% and 0.8 percentage points per year respectively in the period 2021-2027, against an average increase of 0.2 percentage points for this part of the Union, assuming full absorption of traditional Union funding and EU Rehabilitation and Sustainability Mechanism (RRF) grants.
A similar conclusion was made by the credit agency Moody's in its report on the countries of Central and Eastern Europe, reports bne IntelliNews (former business media Business New Europe, which is focused on emerging markets).
EU funding will stimulate economic growth, but institutional challenges will slow or even limit the benefits for some countries, the rating agency warned.
The final levels of investment will ultimately depend on how much money these countries will be able to absorb from EU financial funds.
Countries with less experience in the past, such as Romania, will need to "upgrade institutional capacity, which is not easily achievable and takes time to materialize," the Moody's report said.
In addition to stronger economic growth, fiscal indicators are also likely to improve in these countries. With higher economic growth, the debt-to-GDP ratio will fall cumulatively in the EU by 2.3 percentage points over the period 2021-2027, with Croatia, Romania and Bulgaria recording the largest total reductions respectively by 9.2, 4.3 and 3.7 percentage points during this period.
"However, the challenges of implementing the funds can slow or even reduce the positive effects of them," said Heiko Peters, vice president and senior analyst at Moody's Investors Service.
The challenges will be most serious in the countries that will benefit the most from EU funds, such as Croatia, Bulgaria and Romania, the rating agency's report said.
The previous absorption of European funds varied among the countries of Eastern Europe. According to Moody's, only Poland and Slovenia had a 100% absorption rate during the 2007-2013 budget period. During this period, the absorption rate was the lowest for Croatia (84.2%) and Romania (90.5%), which together with Bulgaria (with absorption of 97.3%) will gain the most from EU funding if the current funding is fully utilized.
