27.02.2023

“I can firmly say that the Bulgarian economy has advanced significantly in its preparations for the introduction of the euro and for its future successful functioning in the euro area. The process of nominal and real convergence is taking place sustainably”. These were the words with which the Finance Minister Rositsa Velkova addressed the participants in the conference “Bulgaria towards the euro” which was organised by the Ministry of Finance and was held at the National Palace of Culture. The thematic conference launched the government’s communication campaign aimed at familiarising the Bulgarian society with all the facts related to the process of Bulgaria’s accession to the euro area and to reasonably dispel any irrational fears.

Minister Velkova summarised that over the past 25 years Bulgaria had demonstrated a stable budgetary position of the general government sector and had had traditionally good positions in terms of the sound public finance criterion. Our country was also making efforts to achieve legal convergence by working to overcome the legal inconsistencies identified in the 2022 Convergence Reports of the European Commission and of the European Central Bank.

“The process of real convergence in Bulgaria has existed for a long time. It is confirmed that the growth of income as well as of wages is in line with the increasing labour productivity, while the higher inflation is the natural result of the convergence of domestic income compared to the EU average”, the Finance Minister added. According to her, our country has a high positive correlation with the euro area business cycle. This correlation is within the range of 77-83% and is close to the average of the new EU Member States and slightly higher than that of the countries that have recently joined the euro area.

Minister Velkova assured the audience that the Bulgarian institutions continued working intensively on the technical preparation for the adoption of the euro. “We will use the time to conduct an information campaign on the introduction of the euro which will be actively deployed after the special parliamentary elections. Instructions will be prepared for the administration and the business for working with the euro, the actions on the preparation of the information systems of the institutions, municipalities and companies will continue, the draft Law on the Introduction of the Euro will be finalized, as well as the remaining necessary amendments to the BNB Law in relation to the functioning of our central bank in a monetary union”, Ms. Velkova further commented.

The conference was opened by Prime Minister Galab Donev who stressed that “our country’s accession to the most developed economic and monetary union in the world and the introduction of the second global reserve currency as the official currency will make Bulgaria more prepared for the current and possible future crises. This will give us additional stability both financially and geopolitically”. Prime Minister Galab Donev said that the caretaker government was determined to continue working on the technical preparation of our country with the same accelerated pace. On the path towards the euro, our country would continue also relying on the support and partnership of the European Commission.

The process of Bulgaria’s accession to the euro area should not lead to a decrease in the standard of living of the Bulgarians; on the contrary, it should lead to an increase. This is what President Rumen Radev said during his participation in the conference. According to President Radev, Bulgaria should preserve its macroeconomic advantages and strengthen its control mechanisms so that in the transition period there is no speculation and price growth, but to preserve the standard of living of the Bulgarians. He urged the political parties which would be facing an election campaign to already think about the necessary policies to achieve these goals, so that there are conditions for competitiveness and growth of the Bulgarian economy. “For me, this is the big goal along Bulgaria’s path to the euro area, namely, Bulgarians to live better”, Rumen Radev said.

The Executive Vice-President of the European Commission Mr. Valdis Dombrovskis said in his speech at the forum that Bulgaria was preparing to join the core of the European project, i.e. the euro area. “It is a matter of much more than replacing the euro with the lev. Above all, it is about choosing to belong to the core of the European project. The euro protects Europe in times of financial or economic crisis. Taking the path towards joining the euro represents a deepening of a country's integration into the EU and the democratic world. It is vital that Bulgaria does not waver on the path it has chosen”, Mr. Dombrovskis said. According to him, since its inception, the euro had become something more than a means of exchange between euro area countries. It is a symbol of Europe’s strength, unity and solidarity at a time when these values are threatened and tested. The euro is a rock of stability in these turbulent times. It is beneficial for the overall cohesion of the EU Member States, he added.

Dombrovskis assured that “the European Commission will continue working closely with Bulgaria to support its efforts. This objective is achievable. We are fully committed to accompany you in the process of joining the euro area. Bulgaria has a place in the heart of the EU, as well as in the euro area”.

The Finance Minister of Croatia Marko Primorac was also among the participants. In his speech he underlined that after joining the euro area Bulgaria will get the same safety net as any other member state. He described this safety net as a life jacket, but then added that this mechanism was used not only in times of crisis as its existence gave additional stability to Member States. Minister Primorac said that this mechanism had a capacity of 470 billion euro and a capital of 80 billion, i.e. the largest capital in the world. 

A discussion was held in the second panel of the forum in which the participants presented their views on our country's progress on the way to joining the euro area and what still needs to be done to be convinced that our country is ready to introduce the euro as a national currency and to cope with the challenges of its upcoming euro area membership.

The conference was attended by over 270 guests from the government, the BNB, the European Commission, representatives of diplomatic missions in Bulgaria, members of employers’ and trade unions’ organizations, economists from the non-governmental sector, etc. The first information video devoted to the euro was also presented as part of the information campaign to be rolled out in the coming months.

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