Bulgarian Cabinet approves euro zone accession plan

Bulgaria’s government approved at its weekly sitting on May 27 the national plan for joining the euro zone on January 1 2024.

“This is an operative plan that sets clear deadlines and goals for institutions […] so that we have the technical readiness to switch to the euro on January 1 2024,” Finance Minister Assen Vassilev told reporters after the Cabinet sitting.

“This a technical first step, there are a series of legislative changes that are necessary, including amending the Bulgarian National Bank Act, and the process will continue in Parliament, as will the wider public discussion,” he said.

Bulgaria has been a member of Exchange Rate Mechanism (ERM2), the euro zone’s “waiting room”, since July 2020, but in recent months the euro zone accession has become one of many issues of contention within the country’s ruling coalition.

One of the four constituent members of the coalition, cable television presenter Slavi Trifonov’s ITN party, in particular, has been very vocal that the euro zone accession plan should only be approved after debate in Parliament, contingent on a cost-benefit analysis of adopting the euro, to be drafted by the central bank and Finance Ministry.

The socialists, another party in the ruling coalition, have also been lukewarm on this issue, with MP Roumen Gechev quoted by Bulgarian National Radio as saying that a euro zone accession date could only be set after the cost-benefit analysis was completed and discussed in the coalition council.

Speaking to reporters, Vassilev appeared to downplay the claims that the Cabinet’s approval of the national plan for joining the euro zone breached the terms of the coalition agreement.

“The coalition agreement states that the euro must be adopted as soon as possible and that a wide campaign will be carried out after the analysis is completed, meaning that the analysis is the basis for the campaign, not the accession decision,” he said.

“More importantly, the technical preparations for joining [the euro zone] on January 1 2024 takes at least 18 months, so we do not have a lot of time to postpone the plan’s approval.”

Vassilev said that the euro zone accession cost-benefit analysis was still being worked on, with BNB yet to complete its part of the report.

(Photo: Steve Ford/sxc.hu)

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