Partial entry into the Schengen area brings significant opportunities
“Partial entry" refers to the agreement among the 27 countries focusing on lifting sea and air border controls, not including land borders yet. Nonetheless, it marks a major step forward. Since joining the EU, Bulgaria and Romania have already implemented some Schengen rules. This expansion of the free-trade zone will impact around 450 million individuals, particularly Romanian and Bulgarian nationals, along with expatriates and potential future expatriates.
According to Eurostat's 2021 data, the largest group of residents in Romania are work permit holders, comprising 66%, followed by foreigners relocating for retirement, family reasons (15%), or studies (12%). The largest expatriate community in Romania is Turkish nationals, making up approximately 8.7%, followed by Moldovans, Italians, French, and Germans. Romania and Bulgaria have various communities of retired residents, including Italians, French, and Americans. Eurostat's figures for 2021 also reveal that Turkish expatriates comprise the largest group in Bulgaria, accounting for nearly 15%, followed by Russians, Ukrainians, Syrians, and Germans.
Should travelers expect rising prices?
European nationals (note that Moldova has been a candidate for EU membership since June 2022) anticipate that Romania's and Bulgaria's partial entry will facilitate travel within the free-trade zone for expatriates. Retired expatriates foresee fewer hurdles in reuniting with family members residing in other European countries or bringing them over. Non-European retirees have similar expectations.
However, there are significant concerns regarding prices. Some fear that entry into Schengen will lead to a rise in airfares to align with the standards of other European countries. These apprehensions extend to accommodation, food, and services, particularly for expatriates residing in tourist destinations. Despite these worries, tourism professionals offer reassurance, suggesting that price hikes are not imminent, at least for now.
On the contrary, the Bulgarian and Romanian governments hope to attract more foreign workers, which is essential for addressing the waves of emigration and labor shortages.
Free movement stands as a valuable asset in attracting expatriates
Romania continues to grapple with significant emigration and a declining birth rate. By 2023, the country's population is projected to reach 19 million, with 5 million having emigrated to Western Europe, primarily to Germany, Italy, and Austria. This emigration trend negatively impacts the economy, highlighting the need for foreigners. Similarly, Bulgaria faces a continuous exodus of young people. According to the United Nations, the country is expected to have only 5.4 million inhabitants by 2050, compared to just under 7 million today.
Like Romanians, Bulgarians predominantly migrate to Germany, followed by the Netherlands, Poland, Austria and Belgium. Bulgaria aims to attract new foreign talent, including digital nomads. Bansko, a small town and ski resort in the southwest of the country, is witnessing an increasing number of Germans, French, and Britons settling in. With its rising popularity, the town is now vying with Sofia to welcome both expat and local families.
Partial entry into the Schengen area has enhanced the appeal of Bulgaria and Romania. Both countries aim to leverage the anticipated rise in people's movement to attract tourists. The Romanian Ministry of Tourism has already observed a surge in tourist numbers, with over one million visitors in the first half of 2023 compared to 813,400 in February 2022. The majority of tourists originated from Italy, Germany, and Israel.
Retaining non-European expatriates
Can joining the Schengen area help Bulgaria and Romania retain their foreign workforce? Since 2017, the Romanian government has increasingly relied on Southeast Asian workers. The visa quota for non-European workers has surged from 3,000 in 2016 to 50,000 in 2021. By 2021, the proportion of Nepalese and Indian nationals surpassed that of Italian, German, and French nationals (almost 6% versus just under 4%, according to Eurostat). However, organizations advocating for the rights of non-European workers highlight a higher risk of exploitation by unscrupulous employers.
The scenario is the same in Bulgaria. According to the Bulgarian Confederation of Employment, only about 30% of job vacancies attract suitable local candidates. Faced with labor shortages and demographic challenges, the country is increasingly relying on non-European workers. In 2023, over 23,000 expatriates from outside Europe secured work permits in Bulgaria, many originating from Ukraine, Turkey, the United States, Brazil, and Taiwan. Bulgarian authorities welcome this diversity and anticipate that joining the Schengen area will enhance their reputation and promote international professional mobility.
Joining the Schengen zone simplifies cross-border movement. However, this presents a dilemma. Non-European expatriates may feel even more inclined to seek employment in another European country. The challenge for Romania and Bulgaria lies not only in attracting expatriates but also, more importantly, in retaining them. Full Schengen membership could benefit both countries as well as foreigners, particularly those already living in the country.
