Bulgaria takes a first step towards the euro

Hurry up in the moment

In ERM II, a kind of "atrium" at the Euro, currency of 39, a non-euro state with a +/- 15% fluctuation band linked to the euro. Before joining the European Union, a candidate must be able to withstand this fluctuation for at least two years without major tensions. The fact that Bulgaria has already unilaterally committed the Lew national currency to the euro does not change this deadline.

The adopted approach differs somewhat from the previous cases, as each member state of the euro must also be a member of the banking union, as before. Memberships in the euro n & # 39; 39 did not even exist. This places the state and its banks under the supervision of the bank supervisor of the ECB and SRB in Brussels. The commitments made by Bulgaria therefore concern the strengthening of supervision in the financial sector. The ECB will also examine the Bulgarian banking sector during the preparatory phase in order not to buy the cat in a bag

The ECB and the European Commission will monitor the implementation of Bulgarian commitments. It is only after a positive assessment of these two institutions that the EEA-II parties will decide on the inclusion of Bulgaria in the exchange rate mechanism, which should coincide with the Membership in the Banking Union, according to a statement released on Thursday. It is expected that the ECB will be able to conclude its investigations in about a year, he continues. But according to the results, it could take a little longer, ECB Vice President Benoît Cœuré told the media

. In the beginning, Bulgaria had more ambitious ideas. Following the semiannual EU Council presidency in January, he had announced that he would submit an application for admission to ERM II during the first half of the year. While Commission President Jean-Claude Juncker initially seemed to strongly support these ambitions, the ECB and a number of member states of the euro have quietly walked behind the scenes. According to the recent reports of the European Commission and the ECB published in May, apart from participation in ERM II, Bulgaria meets the other criteria of nominal economic convergence for the accession to the euro, relating to public finances, interest rates and price stability.

But the ECB also pointed out in its report that the long-term convergence of inflation raised concerns, that Bulgaria needed deep structural reforms and that it needed to improve supervisory practices in the region. the financial sector.

Why did Sofia slow down?

Structural reforms are important to make Bulgaria economically fit and to promote real convergence. There is much to catch up: with a gross domestic product per capita of only 49% of the EU average, Bulgaria was the poorest Member State of the EU as a whole, according to Eurostat in 2017. While the MEPs of the Sofia government suggest something more for a moment, they are also learning from the Greek crisis. This has shown what can happen if the demands of a monetary union overburden an economically weak country.

Considering that the preparations will begin at least a year, after which a participation of at least two years in the ERM II will be necessary and accessions to the euro Still at the beginning of the year, it can be calculated that Bulgaria can become a member of the monetary union by 2022 at the earliest. Thus, the expansion of the euro area takes a longer break: the last accession took place in 2015, when Lithuania joined. In the future, in the interests of equal treatment, a similar approach will be adopted, as in Bulgaria, said Mario Centeno, the head of the Eurogroup, to the media.