site.btaDeputy PM Pekanov for BTA: Bulgaria Not Required to Introduce Euro Once Bulgarians' Incomes Reach EU-Average

August 10 (BTA) - In an interview for BTA on Tuesday, Deputy Prime Minister for EU Funds Management Atanas Pekanov says that there is no formal requirement that Bulgaria introduce the euro once Bulgarians revenues come close to the average in the EU. "I see no reason for such a condition but I agree that it is important to discuss when the best moment for joining the common currency is," he says, adding that this moment depends on the economic situation.

Based on the empirical data and studies he has reviewed and published in a report, the advantages of Bulgaria joining the euro area outnumber the disadvantages, but the risks should not be ignored, Pekanov argues.

According to him, the advantages are related to Bulgaria's further financial and economic integration in the EU, which would improve the country's reputation. This could, but not automatically, lower the interest rates, thus further promoting investments in the economy. One of the big pros is that Bulgaria will join the Single Supervisory Mechanism, which would strengthen the trust in and security of the Bulgarian banking system, Pekanov says.

The cons are related to the additional expenditures that Bulgaria has to undertake before the European Stability Mechanism: a one-time spending of some 1 to 2 per cent of GDP. This is no small sum, particularly for a country which over the years has been fiscally conservative and has saved from other important areas, the Deputy Prime Minister notes. There will also be a one-time administrative spending for the transition to the euro.

There is a risk of some groups of the most vulnerable citizens being affected by a price hike, he goes on to say, adding that as a whole, a serious inflation effect is not expected.

Asked about a possible new revision of the National Recovery and Resilience Plan, Pekanov says that a serious revision harbours big risks as it would lead to a significant delay in the Plan's submission to the European Commission and in the arrival of the resources for Bulgaria.

The situation in Bulgaria will become more difficult in September-October if additional restrictions are imposed due to the pandemic, and quite a serious support for businesses will have to be sought, Pekanov argues.

Asked about the possibility of the caretaker government remaining in power, Pekanov says it is an honour and responsibility when the country needs such a period when a caretaker government has to guarantee stability and functioning of processes. "We have already made such a commitment and, if necessary, we will have to continue with it," the Deputy Prime Minister tells BTA.

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