Political will needed for Bulgaria's euro zone entry in 2024 -central bank governor
Reuters
Published Oct 27, 2022 11:51AM ET
SOFIA (Reuters) - The political instability and lack of a regular government is posing a serious challenge to Bulgaria's prospects to join the euro zone as of Jan. 1, 2024, its central bank governor said on Thursday.
Speaking in parliament, Dimitar Radev said the Balkan country needs a clear political will to make up for the delays prompted by the political turmoil in the past two years if it is to adopt the single currency as planned.
General polls on Oct. 2, the fourth in 18 months, again produced a deadlocked parliament that is struggling to form a working government. New snap polls could not be ruled out.
The European Union's poorest member, which already pegs its lev currency to the euro, pledged to adopt the single currency at its current fixed rate, but has lost momentum after joining the euro zone's "waiting room" along with Croatia in 2020.
Croatia is now set to adopt the euro as of next year.
"There is a serious delay in the process, mainly in taking of political decisions," Radev told deputies. "The only difference with Croatia is that Croatia demonstrated very strong political engagement".
Radev said the lack of a regular government that can take a clear commitment complicates Bulgaria's euro zone prospects.
Asked by lawmakers if the country could realistically join the euro zone in 2024, Radev said: "It depends."
"If we do not have a budget and a clear mid-term fiscal forecast, the condition of meeting the nominal criteria will weigh in the air," he said.
Earlier this week, the caretaker government said it would not propose a 2023 budget draft.
To adopt the euro, Bulgaria has to fulfil criteria of price and exchange rate stability, sound public finances and moderate long-term interest rates, all measured against EU benchmarks.
Radev said Bulgaria at present was not meeting the inflation criterion, but that there are clear indications that this could be open to discussion.
He warned that an eventual delay of the euro zone entry would prompt a decrease in the country's investment-grade credit ratings that will increase its financing costs, already on the rise amid the political impasse.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.