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Bulgaria Prepared for Eurozone Entry
Sofia | 08 December 2009 |
Bulgaria's National Bank Governor Ivan Iskrov has said his country is prepared to adopt the euro, but urged caution over a speedy entry into the single currency zone.
Iskrov said that the Bulgarian National Bank, BNB, will “fully support the government when it decides to send an application for admission into the Exchange Rate Mechanism”, the two-year currency stability test prior to the adoption of the euro. He was explicit that membership in the eurozone is not a privilege but an obligation and refused to speculate when Bulgaria would be allowed to join the single currency zone, Novinite reports.
He added that Bulgaria and other new EU countries will find it very difficult to join the euro zone saying, “new EU countries are in the position of shooting at a moving target with quail cartridges”.
Iskrov concluded that the European Central Bank, ECB and older EU states have shown a fairly conservative policy regarding the entry of new countries into the eurozone. He added that they have started to follow very strict implementation of the Maastricht criteria and noted that many older EU countries adopted the euro without complying with the same criteria.
Bulgaria has indicated that it plans to apply early next year to join the exchange-rate mechanism, and that it will seek to switch to the common currency in 2013.
Initially the application was planned for November, but it was delayed until February at the earliest, after all member states submit their convergence programs which contain the mid-term goals of their fiscal policy.
Joining the exchange-rate mechanism is conditional on whether the new government will succeed in restoring the trust of Brussels.
The lev is already linked to the euro in a currency board that keeps the Bulgarian currency at 1.9558 to the euro. Joining the exchange-rate mechanism may allow the lev to fluctuate by as much as 15 per cent around a central target, though the central bank has said it will leave the lev tightly pegged to the euro throughout the duration of the two year stability test.
Bulgaria's entry into the eurozone, initially scheduled for 2010, has been set back in part because it is conditional on continued fiscal prudence and lower inflation.
Slovenia, Cyprus, Malta and Slovakia are then newest entrants into the euro zone, having joined on 1 January 2007, 2008, 2008 and 2009 respectively
