ECB recommends amendments to Bulgaria’s draft law on introduction of the euro
The European Central Bank (ECB)’s governing council has recommended amendments to Bulgaria’s draft law on the introduction of the euro, set out in an opinion adopted by the council on May 2 and posted on the website of Bulgaria’s Finance Ministry on May 3.
This follows a request to the ECB from the Finance Ministry and central Bulgarian National Bank (BNB) for its opinion on the bill.
The ECB said that the draft should be amended to achieve full compliance with the relevant European legislation.
It said that some provisions affect the use of the euro, which may conflict with the EU’s exclusive competence over the monetary policy of the member states whose currency is the euro.
Automatic repetition of texts from EU law should be avoided and that this should only happen in certain circumstances, the ECB said.
It also advises that references to specific European provisions be included to place the bill in a wider context.
In several cases, the provisions of EU law are not exactly reproduced and should be corrected, the ECB said.
The ECB welcomed the provision in the draft law that the exchange of banknotes and coins from leva to euro by BNB be carried out free of charge, in an unlimited quantity and without a time limit.
It said that, apart from the general rules for conversion and rounding, special, more favourable rules are introduced for the rounding of certain values, such as remuneration for work, benefits, cash and social benefits and pensions.
The ECB welcomed the aim of the bill to create conditions for a smooth transition to the euro in Bulgaria and for the timely implementation of the necessary measures in this regard.
It noted the approach envisaged in the draft law for express legal provisions to ensure the impossibility of unfavourable changes in interest rates on deposits and credit contracts, thereby guaranteeing consumer protection.
Although Bulgaria is yet to have a firm date for when it will joining the common European currency, having its legislation comply with euro zone requirements is one of the prerequisites, known as the Maastricht criteria, before such a decision can be taken.
Recent governments have made joining the euro zone a priority policy area, initially hoping to adopt the euro in January 2024, but high inflation over the past year and a half and other legal issues have pushed back the prospective date of euro adoption.
January 2025 is seen as the earliest possible date now, provided the Eurogroup of euro zone finance ministers agree to be lenient in applying the inflation criterion, the same way they did when Croatia adopted the euro in 2023.
A decision regarding Bulgaria’s accession to the euro area is expected later this year.
(Photo: Kiefer/ flickr.com)
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