Bulgaria puts off Eurozone membership for 2015

Photo: BGNES

Bulgaria would not have accepted joining the Eurozone in its current condition, Bulgarian Minister of Finance Simeon Djankov said in interviews for world media like CNN, Reuters, BBC World Service, and Sky News. Mr. Djankov has admitted that when he became a minister 2 years ago, his wish was Bulgaria to join the Eurozone as soon as possible. “The crisis in Greece and other countries made us more cautious about joining this club,” the financial minister said. He pointed out that Bulgaria must be careful not only with the monetary policy but also with the fiscal one. “We do not know what would the new tax regulations be and we do not like the idea of tax harmonization in the EU,” Minister Djankov said. The minister also proudly said in an interview for CNN that Bulgaria and Estonia could give lessons of fiscal discipline to some western countries. He added that Bulgaria put off adoption of the euro, until the debt crisis that hit smaller economies in the Eurozone was resolved. The country, however, could join the Eurozone in 2015. Minister Djankov added entering the zone could be beneficial to Bulgaria, as it was based on conservative fiscal principles, although the latest events showed these principles were also influenced by politics. Here is what analyst Georgi Angelov told us about the topic.

“The Eurozone has started to change and this creates a feeling of insecurity. The idea for harmonizing taxes is not beneficial for Bulgaria, as well as the rescue fund to which Bulgaria will have to contribute, in order to stabilize richer countries,” Georgi Angelov said. “If poor Bulgaria had to save Italy, which has a debt of nearly 2 trillion euro, this would not be too good. That is why we must see where Italy is going and what the Bulgarian contribution to the rescue fund would be.”

Bulgaria used to be highly motivated to enter the Eurozone but now it waits to see how the current problems would be solved. Will joining the Euro Zone be beneficial at all?

“The problem is we still do not know what has happened in the zone. We do not know if in 10 years time the euro would be a strong currency or it would disappear,” the analyst says. The rescue fund to which all members would have to contribute is also a negative factor and that is why Bulgaria is not so sure if joining the Eurozone would be beneficial.”

What are the positive sides of joining the Eurozone?
“Joining a big monetary union brings more trust in a country, analyst Georgi Angelov says. This also means more investments, trade, and economic growth. However, nobody could have benefits of a weak and crumbling zone. The current issue is if the euro would remain stable, or if the big economies would decide to leave the Euro Zone.”

English: Alexander Markov

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