Bulgaria’s Parliament rejects holding referendum on retaining the lev as sole currency

After a debate lasting several hours on July 6, Bulgaria’s National Assembly rejected a proposal to hold a referendum on retaining the lev as the country’s sole currency up to the year 2034.

The vote was 98 against, including MPs from We Continue the Change-Democratic Bulgaria, GERB-UDF and the Movement for Rights and Freedoms, though most GERB-UDF MPs abstained. In all, there were 46 abstentions, 45 from GERB-UDF and one from WCC-DB.

The proposal told the referendum was backed by 68 MPs, from the pro-Kremlin minority party Vuzrazhdane – which initiated the petition for the referendum, the Bulgarian Socialist Party, ITN, independent MP Radostin Vassilev and two from WCC-DB.

In effect, Vuzrazhdane was seeking to prevent Bulgaria from adopting the euro for the next 20 years.

The proposal was rejected earlier this week by the legal affairs committee, on the grounds that the subject of the referendum was unconstitutional and illegal, because a referendum may not be held on renouncing an international treaty to which Bulgaria is a party. In joining the EU, Bulgaria undertook a treaty commitment to eventually adopt the euro.

The proposal went to a vote in the House even though when it was an agenda item for the budget committee, that committee was not quorate, while the committees on civil society and EU affairs, which had been supposed to examine it on July 6, did not meet at all.

Vuzrazhdane claimed that the law did not allow Parliament to assess whether a referendum was admissible, only to decide on holding one.

BSP MP Kristian Vigenin argued that those who had signed the petition for the referendum should be respected. He said that the BSP supported Bulgaria entering the euro zone, but only after careful consideration of the terms for doing so.

ITN said that it favoured entering the euro zone, but did not want what it called the right of citizens to decide the issue to be restricted.

GERB-UDF MP Branimir Balachev said that the question was formulated in a way – “Do you agree that the Bulgarian lev should be the only official currency in Bulgaria until 2043?” – that contradicted the constitution. He said that Bulgaria was in a currency board system – which pegs the lev to the euro, a measure introduced after the hyperinflation crisis of the 1990s – and this system did not allow the lev to be declared the sole official currency.

Economist Martin Dimitrov, of WCC-DB, said that approving the lev as the sole currency of Bulgaria would mean the instant disappearance of the currency board system, which would certainly lead to inflation accelerating continuously. Not only that, for the 20 years covered by the referendum question, it would not be possible to revert to a currency board system to save the situation, he said.

WCC-DB’s Nadezhda Yordanova said that by holding the referendum, Bulgaria would violate the Treaty on the Functioning of the EU, to which it is a party.

Vuzrazhdane leader Kostadin Kostadinov said previously that should Parliament refuse to call the referendum, he would approach President Roumen Radev to do so.

Kostadinov’s statement is nonsense, because the constitution confers on the head of state the prerogative to decide the date of a referendum after the National Assembly decides to hold one, but does not give the head of state the power to call a referendum.

Critics of the Vuzrazhdane initiative on the poll say that Kostadinov’s party is trying to damage Bulgaria’s EU integration and are dangerous to the economy.

There has been a disinformation campaign for months, on social networks, against Bulgaria adopting the euro, on the false grounds that doing so would have an inflationary effect. This false claim is spread even though no record shows adoption of the euro having an inflationary effect – in contrast, doing so lowers the transaction costs of doing business. However, the disinformation against the euro continues to be spread by the malign and the ignorant.

A recent Eurobarometer poll found that among Bulgarians, 49 per cent were in favour of adopting the euro and 49 per cent against, with the remainder undecided. The poll found that in Bulgaria, support for euro adoption had increased by five points in the past year.

(Photo: Clive Leviev-Sawyer)

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