The Tri-State Area in Southeast Europe


The investment and business scene in Southeast Europe is flourishing and the Skopje office is also one of the fastest growing LGP offices. In this expert interview, Arlind Zeqiri, Dimitrios Droutsas and Vladimir Penkov discuss intraregional economic potential, new forms of cooperation, opportunities for EU integration and the status of international relations between Bulgaria, Greece and North Macedonia.

Philipp Freund (PF): Thank you all for taking the time for a conversation with LGP News. Mr. Zeqiri, how do you see the latest advances in the EU accession process of North Macedonia? Will the relations between Skopje and Sofia keep improving?

Arlind Zeqiri: First, let me stress how delighted I am that we are seeing a breakthrough in some of the last remaining impediments for opening the EU accession talks between Brussels and Skopje. Of course, the compromise reached between Sofia and Skopje with the assistance of Paris and Brussels is not perfect, but it opens a realistic pathway to eventual EU membership for North Macedonia.

I am convinced that common membership in the European peace project is the best precondition to overcoming any historical issues that might still burden the bilateral relationship. In addition, we are now seeing very concrete cooperation on matters of material importance between our countries, such as Bulgaria’s pledge to export more electricity to North Macedonia ahead of this difficult winter season. So, I am very optimistic that our neighbourhood is coming together.

Arlind, you were Minister for FDI in Skopje and are now managing a thriving law and business consultancy firm. Where do you see the greatest potential for the future economic development of North Macedonia, but also the region and the intra-regional trade?

Zeqiri: The greatest impediment for intra-regional trade and economic development – especially between Bulgaria and North Macedonia – is currently infrastructure. The distance from Sofia to Skopje is only 200 km yet it can easily take four hours to drive. You know the old adage: If you want trade, build roads. Therefore, I hope the work on the road and rail connections of Pan European Corridor VII – linking Skopje to the Black Sea at Varna and the Ionian Sea at Durres – and Corridor 10 connecting us to Thessaloniki and Belgrade – will continue swiftly.

Another important point is energy and energy infrastructure: gas interconnectors are planned between North Macedonia and Greece as well as Bulgaria. These would finally allow the gasification of Skopje, help alleviate pollution, and give us access to gas from the Caucasus region. Besides this, the entire region has enormous untapped potential for PV and wind energy, and I am happy to say that LGP Skopje has been successfully advising international clients in the field of green energy projects in the region. Lastly, while an EU membership and the market access and freedom of movement that comes with it is the ultimate prize, the Open Balkan initiative launched last year is also a significant opportunity for North Macedonia and the deeper integration of Western Balkans economies.

Mr. Droutsas, as former Foreign Minister and MEP, you have an intimate awareness of Greece’s neighbours and of the EU – how do you assess the progress in the international relations of the three countries and in the region’s EU integration?

Dimitrios Droutsas: Opening the process for the region’s EU-integration contributed a lot to the overall development of the countries of the Western Balkans as well as their international relations – and I am proud of the role Greece was able to play, particularly through the “Thessaloniki Agenda” as a result of our EU-Presidency back in 2003.

We must be honest and acknowledge that, due to the hesitation shown by the EU and certain Member States in the past years, momentum is lost, and initial enthusiasm has been replaced by growing frustration among the peoples in the region. But this lost ground can and will be regained and the process accelerated – political will within the EU is increasing again, certainly enforced by the recent deployable developments in our continent.

Mr. Penkov, how do you see the political developments in Bulgaria and respectively between Sofia and its neighbouring capital of Athens?

Penkov: Unfortunately, the political situation in Bulgaria, for nearly two years now, must be characterized as unstable, since the political forces, despite stressing on the importance of a stable government, are not able to find the necessary consensus. Despite this situation, which in principle does not favour an improvement of the investment climate, the Bulgarian economy, surprisingly, has registered growth and a record low unemployment rate. One can only hope that after the forthcoming elections on 2 April 2023, there will be a proper government and a working parliament.

Traditionally, the bilateral relations with Greece have been characterized by friendship and cooperation. The active political dialogue, the constantly expanding commercial-economic relations, the intensive educational and cultural exchange, as well as the common interests in the energy sphere are evidence for the strategic nature of these relations in the EU.

Bulgaria is an important trading partner of Greece within the Balkans and an important investment destination for their banks and companies. Greek companies have been one of the largest investors in Bulgaria and are one of the most important economic partners in Bulgaria, participating in the privatization process. Their companies had key roles in the cement and glassware production in the country; even companies like Coca-Cola and Heineken entered the Bulgarian market through Greek companies.

Greece is by far the strongest economic power amongst the three countries – what benefits could be reaped from a deeper regional integration?

Droutsas: Greece has traditionally been a strong economic partner for the countries in the region – for instance and despite the differences that have marked bilateral relations with North Macedonia, but belong to the past now, Greece has been for long the biggest investor in this neighboring country. The deeper the regional and EU-integration, the bigger will also be economic benefits for all partners involved.

Mr. Penkov, how do you assess the future development of Bulgaria as a business and investment location? What are the sectors of interest for international investors?

Penkov: There are significant opportunities in the information and telecommunication technologies, the energy sector, industrial production, agriculture and food industry and, of course, the chemical industry and tourism. Various measures by the state for supporting investments have been legislated in Bulgaria, with the aim of better access to administrative services and the reduction of bureaucratic obstacles.

The swift and burdenless incorporation of trade companies under the Commercial Act, the e-registration of companies and the relatively well-functioning judicial system, especially with the recent ongoing measures to uphold the rule of law, all create an opportunity for investments. The establishment of a currency board and the connection of the Bulgarian Lev with the Euro, the financial stability and the foreign exchange reserve, are grounds for a positive forecast of business development in Bulgaria, and an admission into the Eurozone.

Extremely important in this regard is the admission of Bulgaria and Romania in Schengen, for which, unfairly, due to the disagreement of Austria and the Netherlands, the EU has upheld a negative standpoint. Since both countries observe all conditions for admission and make maximum efforts to uphold the rule of law, to reduce the conditions for corruption through its effective prosecution, as well as the comprehensive strengthening of the border, I expect the Schengen admission to take place already in summer 2023. As for the adoption in the Eurozone – at the latest at the beginning of 2025, Bulgaria has fulfilled all the requirementsregarding public finances, exchange rate, the convergence of long-term interest rates, with the exception of average inflation.

Mr. Droutsas, given the economic and strategic importance of Turkey, do you see business opportunities which can result of such pivot and logically encompass the entire region?

Droutsas: No doubt, Turkey is an important economic player in the region – there are considerable common interests, and I would not hesitate to call business opportunities huge. Even within their sometimes-tense bilateral relations, in the last years Greece and Turkey have managed to multiply the outcome of economic exchange in various fields of common commercial interest – to a large extent due to the opening of Turkey’s EU-integration progress.

I am convinced that our whole region will see similar economic developments and benefits the deeper EU-integration will develop, both for the countries of the Western Balkans and Turkey.

How can our clients benefit from the full coverage of the entire region that LGP / Penkov, Markov & Partners are able to provide together with their strong partner firms in Greece?

Zeqiri: Our clients include very relevant international players from a wide range of sectors and industries such as mining, agriculture, energy, real estate development, construction, and others. In all these fields, North Macedonia is not the only location offering exciting investment opportunities and rewarding projects, so we are able to offer market entry, business development, and legal services for an entire region as opposed to a per country basis. Our clients see this as a very significant added value of the structure that LGP is able to offer together with Penkov, Markov & Partners in Bulgaria and other similar partners in the countries of the region.

Penkov: There is no doubt that the excellent personal relations established within LGP, built as a result of the long-term cooperation serve as a strong background for servicing clients on mutual projects in the three countries. Penkov, Markov & Partners Law Firm, being the only Bulgarian member of the largest association of independent law offices LEX MUNDI, adds further value to this partnership considering the excellent working relations we maintain with law firms in Greece. This way, a high international standard of rendered legal services is ensured, as well as practical assistance for a successful entry into the region and rapid implementation of joint projects of mutual interest.

Droutsas: We know the region and understand its particularities – our long-standing presence and experience, the dense network developed on all levels and the reliable partnerships established make us credible and efficient partners for and in the region. We can pave the way for emerging projects and even create and develop new business opportunities – simply, we can get things done in the region.