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Bulgaria in the Eurozone | България в еврозоната

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  • Bulgaria in the Eurozone | България в еврозоната

    Bulgaria is de-facto in the Eurozone cuz the Bulgarian Lev has been pegged to the Euro for more than a decade now.

    Meaning that the exchange rate remains always the same:

    Simply the notes are with a different design.

    Related image

    Last edited by VODA; 9th January 2018, 21:08.

  • #2
    Peripheral Bulgaria Needs Euro, Schengen to Cut Brexit Risk

    September 12, 2016

    Bulgaria needs to move ahead quicker with steps to adopt the euro and the European Union’s visa-free travel regime to pull the post-communist state from the edge of European politics after joining the EU nine years ago, a top government official said.

    The Black Sea nation of 7.2 million people, the poorest in the EU, already has little political influence and there is growing concern that preparations for the U.K.’s planned exit from the 28-member bloc may make smaller members on the so-called periphery have even less say, Deputy Prime Minister Tomislav Donchev said.

    “How much Europe do we want? For a geographically peripheral European country directly exposed to all crises, this question has substantial meaning,” Donchev said in an interview in Sofia.

    “If the outcome is a political construction in which the core EU countries have different status from the states on the periphery, my forecast is that this will generate risks for the core countries.”

    Bulgaria, whose 2007 membership came with caveats and restrictions because of concerns it wasn’t ready to join the world’s largest trading bloc, is working to bring living standards up to EU norms and keep the economy growing so it can lock itself deeper into the main EU economy.

    The country was hit by the economic meltdown of neighboring Greece and more recently, it has had to cope with migration through its borders northward.

    Euro Preparations

    Even so, the 43-year-old former mayor who is in charge of managing EU funds and economic policy, said the country is ready to get serious about joining the ERM-2 pre-euro exchange-rate mechanism.

    Its public debt is at 27 percent of economic output, below the EU limit of 60 percent, and the budget deficit is forecast at 1.9 percent of gross domestic product, less than the EU ceiling of 3 percent.

    Bulgaria “in no way would be a burden and I hope the EU will have the political maturity to let Bulgaria join the euro zone,” Donchev said. The government hasn’t yet set a deadline for application to the ERM-2.


    • #3
      Bulgaria Is Testing the Ground for Euro Area Accession

      21 October 2016
      Bulgaria is cautiously preparing to join the euro area. This was confirmed by Prime Minister Boyko Borissov after it became evident last week from his letter to European Commission President Jean-Claude Juncker (Luxembourg, EPP) that there are ongoing negotiations. In the letter, which euinside got its hands on, PM Borissov expresses gratitude for the European solidarity demonstrated in dealing with the migrant crisis. In the end of the text, however, it says that joint efforts will continue on the Cooperation and Verification Mechanism (CVM), the accession to Schengen, and “the ongoing negotiations for joining to the Eurozone”. According to the European Commission, however, there is currently not a single state of those outside the currency club, but which have committed by treaty to join when they fulfil the criteria, to have officially announced plans to start preparing for membership.
      Neither of them – Bulgaria, The Czech Republic, Croatia, Hungary, Poland, Romania, or Sweden – is in the exchange rate mechanism (ERMII), the so called euro area waiting room. The European Central Bank (ECB) refused comment, but pointed us at the reply of governor Mario Draghi to MEP Jonas Fernández (Socialists&Democrats, Spain) of June 17, 2015. The accession procedures are listed in detail in this reply, also reminding that a key element of the accession process is economic convergence. It also recalls that entering the euro area’s waiting room requires the approval of all finance ministers from the euro area and the ECB.

      Bulgaria is currently in consultations with the key members of the euro area, announced PM Borissov before the start of the October EU summit in Brussels. In his words, there are ongoing talks with Germany, France, the ECB, and the European Commission. “This is one topic they do not like to have too much talk and noise about, because we have fulfilled the requirements, but a political decision is required after all. And if you start boasting too much about what you are going to do, it will not happen. This is why we are having these negotiations”, explained the prime minister. He added that Finance Minister Vladislav Goranov already visited France on this subject and also has a scheduled meeting with German Finance Minister Wolfgang Schäuble. According to Mr Borissov, entering the euro area waiting room would be very beneficial for Bulgaria, because interest rates on loans will drop and the Lev will be guaranteed even firmer.


      • #4
        Time for Bulgaria to Join Euro Waiting Room - C-Bank Governor

        December 8, 2016

        BNB Governor Dimitar Radev. File photo, BGNES

        Bulgarian National Bank (BNB) Governor Dimitar Radev has said it is the right time for the country to access the ERM II Mechanism, the so-called "Eurozone waiting room".

        Radev has opined that Bulgaria should reassert its commitment to further financial integration with Europe "precisely in these times that both European institutions and the European project as a whole are under very strong pressure. The time is now to confirm our commitment and work for the realization," Capital weekly quotes Radev as saying at an event marking bankers' holiday.

        (St Nicholas, celebrated on December 06, is marked as a festive day by sea men, those involved in the fisheries sector, and bankers alike.)

        "This commitment is an easy one when it comes to words, in good times, but very hard in tough times."

        Earlier, outgoing Bulgarian Finance Minister Vladislav Goranov said, when asked by a lawmaker whether it was time for the country to pursue further steps toward Eurozone integration, that Sofia will submit the demand to EU institutions when there is "external support" for them, in a reference to bigger EU member states and Brussels.

        In January of last year, Goranov said the country was willing to restart talks on adopting the euro with the governments of the 19 Eurozone economies.He then argued Bulgaria should aspire to join ERM II by 2018.

        Bulgaria is operating a currency board arrangement, a tight monetary policy system that pegs its lev currency to the euro at a fixed exchange rate, but is not in Exchange Rate Mechanism (ERM) II, the formal EU mechanism for limiting currency fluctuations. Countries must spend at least two years in ERM II before joining the euro.

        Bulgaria said in September 2012 it was putting on hold its plans to adopt the euro due to the debt crisis and the double dip recession facing the eurozone, along with rising public opposition to abandoning the lev.

        Since then, successive governments have been sending controversial signals as to whether the country should adopt the single European currency sooner or later.


        • #5
          Bulgaria's caretaker government eyes access to euro 'waiting room'

          January 27, 2017

          Bulgaria's interim Prime Minister Ognyan Gerdzhikov said on Wednesday his government wanted to apply formally to join the Exchange Rate Mechanism (ERM-2), commonly known as the euro "waiting room", before it hands over power.

          The Balkan country joined the European Union in 2007, and while it has low inflation and stable public finances its entry into the euro zone has been stymied by widespread corruption and low incomes.

          Bulgarians go to the polls in a snap election on March 26 and Gerdzhikov acknowledged a lot of work would be needed if his administration was to succeed.

          "This is a political issue and we have to consult with EU members," Gerdzhikov told reporters after a government meeting. "There is a lot of work to be done, there are people working on it. I will be happy if we push it through, but I cannot give any guarantees for the time being."

          Gerdzhikov's caretaker government will remain in office until a new administration is installed. But with Bulgaria's two main political parties, the centre-right GERB and leftist Socialists, running neck-and-neck in opinion polls, forming a working government may be difficult, analysts say.

          There is no deadline for Bulgaria to join the euro and financial analysts and economists are divided over whether the Balkan state should rush into the two-year ERM-2 exchange rate mechanism.

          Supporters say doing so would help Bulgaria's integration into the EU and bring it in from the periphery, as discussion about a two-speed Europe intensifies following Britain's decision to leave the bloc.

          Bulgaria meets the formal criteria to adopt the euro - it has low inflation, low interest rates as well as stable public finances, but diplomats say it needs to crack down on corruption before adopting the single currency.

          Bulgaria, the EU's poorest member state, already pegs its lev currency to the euro.


          • #6
            GERB leader Borissov: Bulgaria will apply to join euro zone

            Written by The Sofia Globe staff on March 31, 2017

            Boiko Borissov, leader of the centre-right GERB party that won the largest share of seats in Bulgaria’s parliamentary elections and who thus is entitled to get the first chance to put together a cabinet, said on March 30 that his new government would apply for the country to join the euro zone.

            Borissov twice has been head of government of Bulgaria, and while the country has been in the stewardship of a caretaker government, interim Prime Minister Ognyan Gerdzhikov has spoken of applying for accession to the EU’s common currency.

            Bulgaria’s local currency, the lev, is pegged to the euro through a currency board arrangement put in place after the country’s financial and economic meltdown under a socialist government in the 1990s.

            Polls have shown a slim majority of Bulgarians in favour of the country joining the euro zone, though public opinion in favour of the move showed a notable downturn in favourable opinion about euro zone accession in the wake of the Greek crises of recent years.

            Talk of Bulgaria, an EU member since 2007 and thus called on to accede to the euro, has come and gone over the years, but was tamped down in the wake of the 2008 global financial crisis.

            It has been revived most recently under the administration of Gerdzhikov, whose main task was to deliver the early parliamentary elections of March 26 2017. These elections saw Borissov take the largest share of votes, setting him on course to seek to form a new coalition government, which if the bid succeeds, would make him prime minister for the third time.

            Speaking to centre-right European leaders in Malta at a gathering of the European People’s Party, Borissov said that “we achieved 3.6 per cent growth, a 14 million leva fiscal reserve, seven per cent unemployment, 27 per cent external debt, zero per cent inflation and a budget surplus”.

            After outlining what he described as his country’s financial stability and compliance with the Maastricht criteria regarding low inflation and deficits of no more than three per cent of GDP, the GERB leader said that Bulgaria is about to apply for the euro zone waiting room, the ERM II official exchange rate mechanism.


            • #7
              Accession to Eurozone Remains Top Priority for Bulgaria

              May 24, 2017
              ‘’Accession to the Eurozone remains top priority for Bulgaria’’, Finance Minister Vladislav Goranov said at a conference for the 25th anniversary of the Association of Commercial Banks in Bulgaria, according to BNR.

              ‘’I heard an interesting announcement from Commissioner Moscovici that an unconventional proposal to the countries outside the Eurozone was in the pipeline. I am looking forward to it with interest, because Bulgaria is one of the countries outside the Eurozone. We are convinced that this is the only natural course of the Bulgarian monetary policy’’, he pointed out.

              Vladislav Goranov confirmed that from 15 September teachers will receive a pay rise. After that a new method will be used to evaluate the results of their work.

              Bulgarian National Bank Governor Dimitar Radev also confirmed accession to the Eurozone as an ultimate goal but added that before that there were tasks that Bulgaria should reform.


              • #8
                A couple of positive Eurozone related news from Bulgaria.
                Bulgaria seeks access to the euro waiting room

       with Reuters

                Jun 2, 2017

                Bulgaria has a long way to go before it is ready to adopt the euro, but allowing Sofia into the Exchange Rate Mechanism (ERM-2) will be an acknowledgment of the Balkan country’s reform efforts, its finance minister said today (2 June).

                Bulgaria joined the European Union in 2007 and while it meets the nominal criteria to join the eurozone, it needs to reform its small economy and uproot graft to bring its low living standards closer to its wealthier EU peers.

                The Bulgarian lev (BGN) was pegged to the Deutsche Mark since 1997, when the country introduced a currency board. The Mark has since disappeared and the lev is now pegged to the euro at a constant rate of 0.511494.
                Finance Minister: Bulgaria Only Stands to Win from Joining Eurozone


                2 June 2017

                Sofia, June 2 (BTA) - Bulgaria only stands to win from joining the Eurozone, Finance Minister Vladislav Goranov said Friday, speaking at a forum presenting the 2017 European Semester recommendations specific to Bulgaria. Attending the event is Valdis Dombrovskis, Vice-President of the European Commission for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union.

                Goranov said that a big part of the member states who joined the Eurozone did so "with a very high percentage of cohesion". In his words, the nominal criteria for joining the Eurozone are not sufficient and a discussion is needed on whether strengthening and enlarging the Eurozone should become a priority.

                Speaking to reporters after the forum, Goranov said that the national budget is not going to be updated. The budget of the public social insurance will be revised to reflect the increase of the minimum pension, Goranov said, adding that the revenue to the public social insurance budget and the buffers in pensions expenditure will make it possible to ensure the necessary 97 million leva for the increased minimum pension until the end of the year.


                • #9
                  And two newer ones...

                  Bulgaria is on its Way to the Eurozone

                  June 2, 2017

                  ''Bulgaria is on its way to the eurozone'', Valdis Dombrovskis, EC Vice-President and European Commissioner for the Euro and Social Dialogue, said at the presentation of recommendations to Bulgaria in the framework of European Semester 2017, quoted by FOCUS News Agency.

                  "Firstly I would like to thank the EC representation here in Sofia for organising today's event. There should be such discussions to ensure sustainable growth across Europe. The European Semester seems to be a very good framework to direct the countries’ efforts in this field,” Dombrovskis said.

                  He pointed at significant imbalances in the economy since 2015, including the high corporate debt. On the other hand, Bulgarian authorities have taken measures in response to recommendations on the pension sector in 2016. There is a high level of outstanding debt. The measures, necessary in the banking sector, should be taken more quickly. Regarding debt collection, things there will also be improved, according to Dombrovskis.

                  Bulgaria is still facing major structural changes and needs to overcome challenges in the financial sector and insurance. He also mentioned the need of improvement in less developed rural areas, healthcare and public procurement.

                  With regard to the eurozone, Dombrovskis said there are nominal exchange criteria. "We have discussed this issue. Some aspects look pretty well. You are walking towards the eurozone. You need to join the exchange rate mechanism," he added.
                  Bulgaria to be the Next Eurozone Member

                  By Marc Chandler

                  June 7, 2017

                  Both S&P and Fitch upgraded their outlooks for Bulgaria last Friday from stable to positive. The moves come even as the nation moves closer to being the next member of the Eurozone.

                  POLITICAL OUTLOOK

                  Ten years after joining the EU, Bulgaria is signaling that it wants to adopt the euro as well. Finance Minister Goranov confirmed last week that it would request joining ERM-2, which is a precursor to adopting the euro. While no timetable was given yet, we believe Bulgaria will move quickly since the center-right GERB just won the snap election in March.

                  Bulgaria is hoping to leave behind a period of extended political uncertainty. Prime Minister Borisov takes the helm of the government for the third time. His center-right GERB party first came to power in 2009. He resigned in February 2013 after anti-austerity protests brought his government down. GERB won the May 2013 elections but fell short of having a majority, which ushers in a technocratic government that lasts for about a year.

                  October 2014 elections led to a splintered parliament, but Borisov took power for the second time to lead in coalition with the so-called Reformist Bloc. When Socialist candidate Rumen Radev won the presidential election in November 2016, Borisov again resigned as Prime Minister. GERB won snap elections in March 2017 but again fell short of having a majority. It is now ruling in coalition with three nationalist parties.

                  European officials appear receptive to Bulgaria’s entry into the Eurozone. French President Macron has reportedly told Borisov that he will support any efforts to join the euro once the criteria have been met. European Commission (EC) Vice President Dombrovskis recently trumpeted that “Bulgaria is on its way to the Eurozone.”

                  This is a break from the past. Back in 2008, the EC suspended aid for failing to act against corruption and organized crime. This may be reading too much into Brexit, but we wonder if European policymakers are keen to show that integration is still moving forward. Indeed, no country has left the Eurozone and it has only gotten bigger since its inception.

                  The IMF highlights corruption as the biggest obstacle for business in Bulgaria. While Bulgaria scores very well in the World Bank’s Ease of Doing Business rankings (39 out of 190), it does less so in Transparency International’s Corruption Perceptions Index (75 out of 176 and tied with Kuwait, Tunisia, and Turkey). Even Romania comes in higher at

                  EURO ADOPTION PROCESS

                  Stage 1 is EU accession. Bulgaria and Romania joined the EU on January 1 2007. This requires largely political convergence, such as stable democratic institutions, rule of law, human rights, and protection of minorities. Of the two, Bulgaria is considered further along with regards to euro adoption.

                  At some point following EU accession, the candidate will join ERM II. The standard fluctuation band is +/- 15% around a central parity. Success requires that the currency remain within its fluctuation band “without severe tensions” for at least 2 years.

                  The lev has been pegged to the euro at a central parity of 1.95583 since 1999. There are no fluctuation bands. Before that, the lev was pegged to the Deutsche mark at 1000: 1 on July 1 1997, when a severe banking crisis coupled with near-hyperinflation called for drastic measures after several failed attempts at stabilization. However, the decision was not an easy one as the banking crisis added a new element of risk.

                  A currency board is drastic in the sense that the country gives up all sovereignty with regards to monetary policy. Each unit of domestic currency is backed by an equivalent amount of foreign currency transacted at the pegged exchange rate. This requires that foreign reserves equal the domestic monetary base (M1).

                  In theory, a pure currency board can never be broken. If there is a run on the domestic currency, shrinking money supply would drive up interest rates and make it more attractive to stay in the domestic currency. Argentina did not run a pure currency board, and so it was eventually broken.
                  Stage 2 is Eurozone accession. This could be said to require largely legal and economic convergence. The legal criteria ensure that the legal foundations for monetary union are in place, foremost being central bank independence. The economic criteria include, and adheres to the generally recognized notion that countries in a monetary union will require sustainable macroeconomic convergence amongst the countries.

                  The EU publishes its Convergence Report at least once every two year or at the request of a member state that would like to adopt the euro. The last one was published in June 2016. Of the five Maastricht Criteria, Bulgaria met three: price stability, public finances, and long-term interest rate convergence. Bulgaria fell short by not being in ERM-2 (though it would easily qualify with the peg) and having incompatible laws regarding central bank independence.

                  We think these two areas will easily be met by the current government. By running a strict currency board, Bulgarian policymakers have already given up discretionary monetary policy. As such, a move to euro adoption wouldn’t entail any drastic changes with regards to the exchange rate.

                  ECONOMIC OUTLOOK

                  The economy is growing steadily. GDP growth is forecast by the IMF to decelerate modestly to 2.9% in 2017 from 3.4% in 2016, and slowing further to 2.7% in 2018. GDP rose 3.4% y/y in Q1, and so we believe there are some upside risks to the growth forecasts.

                  Price pressures bear watching, with CPI inflation accelerating to 2.6% y/y in April from 1.9% in March. That was the highest rate since June 2013, but this is welcome after an extended period of deflation from 2013-2016. Because it runs a currency board, the central bank does not have an independent monetary policy.

                  Fiscal consolidation is running ahead of schedule. In its last Article IV assessment, the IMF “noted that fiscal consolidation is advancing faster than anticipated, and commended the authorities for their successful efforts in strengthening revenue administration.” The budget was balanced in 2016, but Bloomberg consensus sees a modest deficit equal to -1% of GDP in both 2017 and 2018.

                  The external accounts remain strong. Despite robust economic growth that has stoked import demand, the current account surplus was about 4% of GDP in 2016. It is expected to narrow slightly to 2% in both 2017 and 2018. The IMF estimates that Bulgaria’s Net International Investment Position improved from -93% of GDP in 2010 to -61% in 2015, and stems from both an increase in reserve assets and a decrease in external liabilities.

                  Foreign reserves have risen steadily. At $24.2 bln in April, they cover over 9 months of import and are nearly 3 times larger than the stock of short-term external debt. At EUR21 bln, reserves fully cover the monetary base (M1).

                  Our own sovereign ratings model showed Bulgaria’s implied rating falling a notch this quarter to BBB/Baa2/BBB. This suggests limited upgrade potential for actual ratings of BB+/Baa2/BBB-, though it seems both S&P and Fitch should upgrade to bring Bulgaria into line with us and Moody’s.


                  With the victory of Macron in France, the forces against greater European integration have hopefully been turned back. While Brexit initially seemed to foster a period of greater fissures in European unity, it now seems to have been an isolated, idiosyncratic event. Besides Macron, Merkel’s fortunes have improved in Germany and elections in the Netherlands and Austria this year have also seemed to favor pro-European candidates. Bulgaria will likely be the next member of the Eurozone, which has yet to lose a member even as it expands into the east.


                  • #10
                    PM: Boyko Borisov: Eurozone is Obligatory

                    June 5, 2017

                    ''The eurozone is obligatory, Prime Minister Boyko Borisov'' said during a discussion, quoted by FOCUS News Agency.
                    He said Bulgarians wrongly say that when they are ready, when they want, then they will enter the eurozone.

                    Instead, “it is very clearly written that we have to accept the euro – we have a treaty. As a nation, as political elites, we have to make a decision and say – we will make every effort to enter the eurozone waiting room. Otherwise, we cannot be angry that eurozone countries want to secure their currency,” Borisov explained.

                    In his words, Bulgaria has no other way but to actively work at all levels for the integrity and strength of the European Union.
                    He also said that the country currently has neighbours with problems and must be a perspective for people in this region.

                    Regarding Belene nuclear power project, Borisov said the sole way for construction of the plant is a public-private partnership with privatisation of the project, and with some state participation, depending on the experts’ opinion. The Bulgarian Academy of Sciences is currently assessing the project and will make suggestions.


                    • #11
                      Merkel and Macron Hand Boost to Bulgaria's Euro Aspirations

                      By Elizabeth Konstantinova and Arne Delfs

                      Courting support at the heart of the European Union for its plan to adopt the euro, Bulgaria scored successes in Germany and France, where appetite for integration has been reawakened following the defeat of populists in key elections.

                      Chancellor Angela Merkel and President Emmanuel Macron both said they’d back the Black Sea nation’s efforts to swap the lev for the common currency. They told Prime Minister Boyko Borissov during his trips to Berlin and Paris that they’d help Bulgaria enter the ERM-2 exchange-rate mechanism, the precursor to joining the euro area.

                      “From our point of view Bulgaria should be able to participate in everything as quickly as possible,” Merkel told reporters Wednesday in the German capital. She said the EU must create a “vista of hope” for the Balkan region, where the prospect of joining the world’s biggest trading bloc is seen as a tool to ease renewed tensions.

                      Bulgaria, which joined the EU a decade ago and remains its poorest nation, has made euro adoption a priority in the early weeks of Borissov’s third cabinet in eight years. Renewed zeal for integration may provide a window of opportunity for the country of 7 million people after shocks including the Greek debt crisis, a surge in refugees and, most recently, Brexit. Five of the currency union’s existing members are from the bloc’s ex-communist east.

                      Bulgaria already meets the EU’s public-debt and fiscal requirements for joining ERM-2. Its currency, the lev, is pegged to the euro under a currency board system imposed 20 years ago in the wake of a banking crisis.

                      The government plans to apply for ERM-2 membership when there are assurances its bid won’t be rejected, Finance Minister Vladislav Goranov said last week in an interview. He voiced concern that Bulgaria’s wealth gap to other EU members is too wide.

                      “In the face of Brexit negotiations, EU leaders may choose to send a sign of unity and openness to enlargement,” said Ciprian Dascalu, chief economist at ING Bank NV in Bucharest. He warned of an “ongoing debate about readiness” in terms of convergence, the labor market and institutions. “This is up to political negotiation.”

                      A stay exceeding the usual two years in ERM-2 would be a possible way for Bulgaria to narrow the convergence gap, Dascalu said.

                      Macron said he’d also back Bulgaria’s long-standing bid to join the EU’s visa-free Schengen zone. Entry has been held up because of concern over corruption and the judiciary. Bulgaria ranks worst in the bloc for graft, according to Transparency International.

                      The yield on Bulgaria’s euro-denominated bonds due 2024 fell 1 basis point to an all-time low of 1.272 percent at 4:40 p.m. in Sofia, data compiled by Bloomberg showed.


                      • #12
                        Macron makes push for STRONGER EU by backing bloc’s POOREST member to join Eurozone

                        EMMANUEL Macron has pledged to “fully support” Bulgaria’s efforts to adopt the euro currency and join the passport-free Schengen zone in a bid to deepen EU integration and strengthen the eurozone

                        By ROMINA MCGUINNESS

                        Emmanuel Macron and Boyko Borisov


                        During a joint press conference with Bulgarian Prime Minister Boyko Borisov in Paris, Mr Macron said that France would “stand by Bulgaria,” adding that it would push for it to join the eurozone and the Schengen Area once it had “fulfilled all nominal convergence criteria”.

                        France’s newly elected pro-European president said: “I am working towards making good on my campaign promise to deepen EU integration, which is why I am offering my full support to EU leaders, including Mr Borisov, who, like myself, believe in a united Europe.”

                        Mr Macron added that he was “happy” to note that Mr Borisov was a staunch European integrationist.

                        Mr Borisov, for his part, congratulated the 39-year-old centrist on his landslide win against far-right leader Marine Le Pen in last month’s presidential election, saying that the young president would bring “new dynamism to Europe”.

                        The Balkan country joined the European Union in 2007 and is the bloc’s poorest member.

                        Bulgaria has relatively low inflation, a small fiscal deficit and one of the EU’s lowest debt levels; but living standards are less than half of the EU average and its economy is riddled with corruption.

                        Emmanuel Macron is elected president of France, defeating Marine Le Pen, who threatened to take France out of the European Union.

                        Whilst it does not have a target date for adopting the euro and joining the passport-free travel zone, Bulgaria has upped its efforts to convince fellow member states that it should be allowed to join the ERM-2 currency grid, otherwise known as the euro’s “waiting room”.

                        “We will strive to convince our partners that we still have a long way to go, but, joining the ERM would be a good assessment of the efforts the Bulgarian society is making and the confidence it has in the common European idea,” Bulgarian Finance Minister Vladislav Goranov told an economic forum in Sofia last week.


                        • #13
                          Prime Minister Borisov: Bulgaria is not a Risk for the Eurozone

                          September 29, 2017

                          Bulgaria is not a risk to the eurozone and deserves to be in the "waiting room" because it meets all the criteria, Prime Minister Boyko Borisov said at a meeting with European Council President Donald Tusk in Estonia, reports Sega.

                          According to the government press office, Borisov pointed out that Bulgaria had good macroeconomic indicators and noted that 2016 was the first fiscal year with a surplus after 2008. He also pointed out that our country is third, after Estonia and Luxembourg, with the lowest government debt, as a relative share of GDP. Borisov noted the growth of the Bulgarian economy, investment and construction in Bulgaria, the development of business and the significant drop in unemployment, as well as the strong fight against smuggling.

                          The Prime Minister has categorically stated that Bulgaria will work towards constructive compromises on all important issues for the European Union and adds: "Our country will rely on an open dialogue and partnership with all the EU member states during the Bulgarian presidency."

                          In the conversation with Tusk, Borisov pointed out that, with regard to policy towards the Western states, he expects a clear perspective, not empty promises. "Bulgaria, together with the other EU Member States, is a great mediator and can help bring closer understanding between the Balkans and the Union," the prime minister said.

                          Donald Tusk has given full support to Bulgaria's priorities. "Bulgaria is a leader, and I see the efforts that you personally put in. I will be behind you and you can rely on me for everything - both during the presidency and the entry into the eurozone waiting room", quoted the President of the European council.

                          Prime Minister Boyko Borisov thanked Tusk for his agreement to organize a summit of EU leaders on the "Western Balkans" in Sofia during the Bulgarian presidency. He expressed our readiness to start talks about the preparation of the meeting with Tusk's team and the Secretariat of the European Council, as well as all the commissioners whose subjects are relevant to the policy of the Western Balkans.


                          • #14
                            ESM: Bulgaria, Romania must Meet All Criteria to Enter Eurozone

                            October 4, 2017

                            Bulgaria and Romania can join the Eurozone once they have met all membership criteria, the managing director of the European Stability Mechanism (ESM), the Eurozone's rescue fund, said. "It is an ongoing process [...] Other countries should join but they need to meet the criteria," Klaus Regling said in response to a SeeNews question during a press briefing in Luxembourg last week.

                            "The convergence criteria are legally defined in the Maastricht Treaty and I know that Bulgaria has made a significant progress in meeting those criteria but hasn't met all of them," he added. Bulgaria and Romania committed to adopt the euro upon their accession to the European Union in 2007. The euro convergence criteria are measured through consumer price inflation, budget deficit, government debt, long-term interest rates and deviation from central exchange rate. Speaking over the weekend after a meeting with European Council President Donald Tusk, Bulgaria's prime minister Boyko Borissov said the country has met all the criteria to enter the Eurozone's waiting room, the Exchange Rate Mechanism II (ERM II).

                            "Bulgaria does not represent a risk to the Eurozone and deserves to be in its waiting room because it meets all the criteria for that," Borissov said in a statement issued by the government's press office. Borissov stressed the country's robust macroeconomic performance, budget surplus and low level of government debt-to-GDP ratio - the third lowest in the EU, as well as the significant drop in unemployment. Bulgaria's annual consumer price inflation stood at 1.4% in August.

                            The state budget showed a surplus equivalent to 2.2% of the GDP in the January-August period. Government debt totalled 6.0 billion levs, or 12% of GDP at the end of July. The Bulgarian currency, the lev, has been pegged to the euro at an exchange rate of 1.95583 levs per euro since 1999. Regling's comments echoed the position of the European Central Bank (ECB), which said in July 2016 that Bulgaria and Romania are among the seven countries that do not fulfil all conditions to enter the Eurozone.

                            "The seven countries under review (Bulgaria, Croatia, Romania, Czech Republic, Hungary, Poland, Sweden) comply with most of the quantitative economic criteria, but none of them fulfils all of the obligations laid down in the Treaty, including the legal convergence criteria," the ECB said in a convergence report at the time. On Tuesday, Romania's central bank kept its monetary policy rate at record low 1.75% - in line with analysts' expectations, as annual consumer price inflation slowed down to 1.2% in August, from 1.4% in July, according to official data.

                            Romania's consolidated budget deficit edged up to 0.63% of the projected 2017 gross domestic product (GDP) in the first seven months of 2017, up from 0.23% in the prior-year period. Romania's former prime minister Sorin Grindeanu said earlier this year that Romania will adopt the euro only after wages in the country come close to those in other European Union member states.

                            The two southeast European neighbours have the lowest monthly wages in the EU, according to the most recent official national statisics. Romania's net average wage totals 520 euro, while Bulgaria gross wage stands at 514 euro.

                            Source: SeeNews


                            • #15
                              Google translated article
                              Bulgaria is the main candidate for the eurozone, but there is an obstacle

                              The country should not be judged solely by economic criteria, the Financial Times said


                              The turning point in the eurozone is the fact that the talks in Brussels are aimed at increasing the list of countries , which use the euro as a national currency.

                              After experiencing several threats to Grexit (Greece's exit from the European Union) and slipping from the trap of low economic growth, the European Commission wants to welcome countries that do not use the euro as their currency in the eurozone. Bulgaria is the main candidate to increase the number of eurozone members from 19 to 20.

                              After meeting with Bulgarian Prime Minister Boyko Borisov on Wednesday in Brussels, EC President Jean-Claude Juncker stood behind the country's bid to become the newest member of the eurozone. "I must say unceremoniously that Bulgaria is ready," Juncker said.

                              Well-informed sources from Brussels are confident that Bulgaria can be classified and show that the European project is really back in the game. In theory, our country has many things to claim to become a member of the eurozone. Its currency since 1999 has been fixed to the euro (giving way to its exchange rate control) and the public finances of the government are in good standing.

                              At 29%, the ratio of Bulgarian debt to gross domestic product (GDP) is less than half of the required criterion, and the state budget has a surplus over the German one of 1.6%.

                              Borisov, a member of the European center-right family, including Juncker, said his government will apply for entry into ERM II, the two-year compulsory waiting room for the euro, by the end of the year.

                              But there is an obstacle. Outside Brussels, there is less enthusiasm to allow the poorest EU member to join the economic and monetary union - a membership that is considered to be the highest sign of European integration.

                              Skeptics comment that membership in the eurozone should be more than an exercise in economic thinking within the box. Bulgaria is ranked as the most corrupt state in the European Union, according to Transparency International. The EC itself accepts that the biggest challenge facing the government in Sofia is coping with high levels of corruption and organized crime. The admission of Bulgaria, a member of the EU from a decade, to the European Monetary Union will be against the tradition amid growing concerns about the rule of law from Poland and Malta.

                              Negotiations on Bulgaria's bid for the eurozone also shed light on the obligations under the Euro Treaty, known as the Maastricht Treaty, which no longer coincide with the reality of the enlarged bloc of 28 member states. Compiled in the 1990s, the pre-accession criteria are focused almost entirely on economic indicators rather than on a wider view of the country's institutional readiness.

                              A bigger problem for the EC is that richer member states that are mature for joining the eurozone - Sweden and Denmark - do not want to adopt the euro as a national currency. Denmark even has a steady and highly appreciated state opportunity to refuse to join the eurozone.

                              Jean-Claude Juncker can see one dream of a single currency for everyone. In the short term, however, this ambition may simply be expensive.