News & Analysis

Bulgaria to Enter Eurozone Waiting Room In Coming Months

European Commission Vice President Valdis Dombrovskis, who is also responsible for the Euro and Social Dialogue, has told Bulgarian state television that the country could become part of the ERM II, known as the waiting room for the eurozone. Bulgarian finance minister Vladislav Goranov had stated earlier this year that the country will apply to join the ERM-II by mid-2018.

EU countries that have not adopted the euro are expected to participate for at least two years in ERM-II before joining the eurozone. Dombrovskis added that Bulgaria’s fiscal policy is a good example amongst EU member states – it has a balanced budget and low levels of government debt. Negotiations are currently focused on the financial sector and the country joining the banking union. “It is realistic to start this process during the Bulgarian presidency,” Dombrovskis told a public debate on Bulgaria’s euro zone accession in Sofia. He added that Bulgaria needs to work to convince all member states and the ECB of its plan.

Following the biggest financial crisis in the country’s history, triggered by the collapse in 2014 of Corporate Commercial Bank – the fourth largest lender – Bulgaria sought to join the banking union and put its banks under the scrutiny of the European Central Bank, but these plans have since been delayed. Mr Goranov, who spoke at the same forum, added that it would be “hypocritical” if Bulgaria was denied access to ERM-II, and that joining the ERM-II should precede joining the banking union.

European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici welcomed Bulgaria’s enthusiasm to join the eurozone. However, he insisted that there should not be merely a formal alignment between the countries sharing the single currency, but a genuine one, as Bulgaria ought to be well prepared for accepting the euro. “One of the key lessons that we have learnt over the last two decades is that real economic convergence is just as important as nominal convergence,” said Mr Moscovici.