An informal meeting of finance ministers of Eurozone countries on Thursday is expected to clarify the controversy over whether Bulgaria would apply to join the European Exchange Rate Mechanism, ERM – effectively the single currency club’s “waiting room”.
Bulgarian Finance Minister Vladislav Goranov said previously that he would notify the Eurozone ministers on Thursday of Bulgaria’s intention to take the next step on the road to adopting the euro.
On Tuesday, Bulgaria sent a letter expressing intent to join ERM 2, Reuters reported.
However, this seemed to contradict previous statements of Bulgarian Prime Minister Boyko Borissov, that Sofia would not push the issue until it got a prior green light from other EU countries.
Meanwhile, Bulgaria has not received a green light to join – and some member states and EU institutions remain openly opposed to the idea.
Migrant crisis, delayed reforms, keep Bulgaria outside:
While Bulgaria joined the European Union over a decade ago, it still remains outside two key EU systems – the passport-free so-called Schengen zone and the common currency area.
Although both the migration crisis in Europe and Bulgaria’s lack of domestic reforms stalled the country’s bid to join the Schengen zone, Sofia hoped to push forward its Eurozone application, using the momentum of its EU presidency, which started on January 1 and ended on June 30.
At the launch of its EU presidency in January, referring to ERM 2, the Prime Minister reminded his partners of Bulgaria’s economic progress.
“Bulgaria has a stable currency, annual growth of 4 per cent and low unemployment. We are ready to enter the Eurozone waiting room,” Borissov said. “We have done our homework; we can enter the moment we are invited,” he added.
The purpose of ERM 2 is to stress-test a candidate state’s ability to maintain financial discipline and the stability of its currency against the euro.
Bulgaria meets the membership criteria on inflation, interest rates, the level of public debt and the budget deficit – and it has operated a fixed exchange rate for the national currency, tied first to the German mark and then to the euro, for two decades.
The timing of its potential bid was also as good as Sofia could have hoped for, after it successfully navigated the EU presidency, thereby gaining more trust of European institutions.
Moreover, the government has the backing of European Commission President Jean-Claude Juncker, who wants to see the union consolidate around the common currency.
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