Region: Bulgaria to continue pursuing euro

By Clive Leviev-Sawyer

For the Sofia Echo

Leave aside the wry jokes about successful candidacies for the eurozone depending not on the criteria for membership but on the common currency's continued existence; Bulgaria still harbors such ambitions, but seems to lack a sense of urgency.

This much emerges from recent statements by three of the people closest to the issue of Bulgaria's euro accession.

But even while EU leaders meet in Brussels to discuss the tenuous future of Europe's single-currency system, leaders in Bulgaria continue to believe the country's future is in the eurozone.

When Boiko Borisov's government came to power in July 2009, euro accession was a key talking point, but with the economic crisis and subsequent sovereign debt crisis in some countries in the zone, this discussion dwindled.

Finance Minister Simeon Dyankov indicated Dec. 3 that Bulgaria would continue to pursue its goal of eurozone membership but for now was waiting to see the developments in the zone.

"We have consistently fulfilled the Maastricht criteria for the euro area for the second year," Dyankov told journalists. "Our government debt is around 15 percent of GDP, and inflation and interest rates have calmed down. If we wanted to enter the ERM II now, we would have fulfilled all criteria for this purpose. And we have stringent budget criteria ensuring long-term financial stability in Bulgaria."

He said the eurozone would benefit from fiscally responsible countries like Bulgaria adopting the common currency.

Fiscal union

In an interview Dec. 4, Dyankov was asked whether he saw a collapse of the eurozone as likely.

"A few months ago, I thought [the likelihood of collapse] was zero percent," he said, but now he believed there was a chance of "more than 50 percent, 60 percent" that in the next six months, the eurozone in its current form could disintegrate.

However, he added that this was because of the push by German Chancellor Angela Merkel for a fiscal union, backed by countries including Austria, the Netherlands, Finland, Sweden, Estonia and Luxembourg, according to Dyankov.

In an interview published in the Bulgarian-language Standart News Dec. 6, Ivan Iskrov, governor of the central Bulgarian National Bank - asked whether eurozone accession was still a priority for Bulgaria - was quoted as saying, "We have a commitment, included in Bulgaria's EU accession treaty, that the country will join the eurozone. This has not changed, and it will happen."

"But first of all, let's see what we will accede to and what will come out of the eurozone itself," Iskrov said.

Economy Minister Traicho Traikov, interviewed on CNBC Dec. 1, said Bulgaria still wanted to join the eurozone despite recent predictions that the single currency would collapse but did not agree with a single tax rate in the currency zone.

"I know now it's fashionable to predict the end of the monetary union, but I think common sense will still dominate and it's going to survive," Traikov said. "Of course, in the end, we want to be part of it."

"Ever since we introduced a currency board in 1997, our focus has been on keeping the fundamentals right, so we ran government surpluses for most of these years."

Traikov said that, "for us, being a part of the eurozone means lower interest rates on credits for business."

Clive Leviev-Sawyer can be reached at news@praguepost.com