Bulgaria could join euro zone's ERM-2 within a year -PM

by Reuters
Thursday, 26 April 2018 12:14 GMT

(Adds detail, background)

SOFIA, April 26 (Reuters) - Bulgaria could join ERM-2, the two-year "waiting room" for euro zone membership, within a year if European Union and European Central Bank officials agree, Prime Minister Boyko Borissov said on Thursday.

The Balkan country has said it plans to apply for membership of the Exchange Rate Mechanism (ERM-2) by the end of June, when its six-month term as EU president expires, although Borissov declined to confirm that timeline on Thursday. Speaking to reporters on the sidelines of an economic forum, he also said Sofia wanted to join the EU's Banking Union "one day after" it joins the ERM-2, rather than joining the banking union first as the EU and ECB would prefer.

"I am an optimist that within a year we can congratulate ourselves," Borissov said.

Bulgaria, which joined the EU in 2007, meets the formal criteria to adopt the single currency, before which it would need to spend at least two years in the ERM-2 "waiting room".

Its lev currency has been pegged to the euro for two decades and Bulgaria produces fiscal surpluses, keeps inflation at bay and has one of the lowest public debt burden in the EU.

But critics say the EU's poorest member state needs to better align its economy to richer Western peers and prove it can crack down on corruption before it can adopt the euro.

Borissov, who met European Commission Vice President Valdis Dombrovskis earlier on Thursday, said Brussels will hand Bulgaria a detailed road map for euro entry with clear criteria and timelines.

"What we are working with the European Commission at the moment is to prepare the documents, to hand them in and to get a road map in a month," he said.

The push for euro membership is part of plans to deepen Bulgaria's integration into the EU and avoid being left on the periphery as member states discuss a multi-speed Europe.

Speaking at the same forum, Finance Minister Vladislav Goranov said he does not see a reason that should stop Bulgaria from entering the ERM-2, adding it would be "hypocritical" if Bulgaria was denied access. (Reporting by Tsvetelia Tsolova Editing by Catherine Evans)

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