Extended search
Bulgaria on Doorstep of Eurozone Conference

UPDATED IMF Managing Director Georgieva Urges Bulgaria to Sustain Growth Beyond Euro Adoption

Konstantin Karagyozov
IMF Managing Director Georgieva Urges Bulgaria to Sustain Growth Beyond Euro Adoption
IMF Managing Director Georgieva Urges Bulgaria to Sustain Growth Beyond Euro Adoption
International Monetary Fund Managing Director Kristalina Georgieva addresses the high-level conference “Bulgaria on the Doorstep of the Eurozone” in Sofia, November 4, 2025 (BTA Photo/Milena Stoykova)
Sofia,  
04.11.2025 10:55 | UPDATED 04.11.2025 11:47
 (BTA)

Addressing the high-level conference “Bulgaria on the Doorstep of the Eurozone” in Sofia on Tuesday, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said that although adopting the euro is an important step, it does not in itself guarantee a higher standard of living. The event in Boyana Residence is part of the communication campaign for Bulgaria’s adoption of the euro on January 1, 2026, organized by the Finance Ministry and the Bulgarian National Bank.

Georgieva said that the task now is to embrace the euro, combine it with sound policies, and propel the process of economic convergence to the next level. She emphasized that, at a minimum, Bulgaria should aim for sustainably higher growth rates so that within the next decade, income per capita could reach the European Union average.

Georgieva also said that Bulgaria faced serious medium- and long-term challenges, including an aging population, the outflow of human capital, and significant investment needs in infrastructure and defence – all of which added pressure on fiscal spending. Although growth exceeded the EU average, it was still insufficient to ensure enough high-quality jobs and fiscal revenues, she said.

In her words, the short answer to how better development could be achieved despite these challenges lay in responsible policies aimed at cooling the economy, safeguarding economic and financial stability, and enhancing productivity, competitiveness, and private sector growth.

She summarized Bulgaria’s domestic policy priorities in three main tasks. The first was a cyclical tightening of fiscal policy. Fiscal discipline had served the country well over the past decades, but the current priorities, she said, were threefold: moderate wage increases in the public sector to curb domestic demand, higher pension contributions to reduce the pension system deficit, and expanding high-quality public investments so that potential supply could catch up with demand.

The second task, she continued, was close monitoring of financial stability risks. Stretched real estate valuations required particular attention and could necessitate further tightening of macroprudential policy to contain credit growth and prevent overheating. Georgieva recalled that the Bulgarian National Bank had introduced appropriate borrower-based measures in 2024 but added that it should now be ready to tighten them further if necessary.

The third task was to accelerate structural and governance reforms, which she described as crucial for boosting productivity and ensuring sustainable real income growth. Key priorities, she said, should include mobilizing untapped labour potential and attracting foreign talent to offset population aging and emigration. Investment should be directed toward education and artificial intelligence, while reforms should focus on building strong institutions, transparency, and good governance – including in state-owned enterprises.

She added that with broad public engagement, open and persuasive communication, and decisive measures to support vulnerable groups, progress was entirely achievable. Fiscal and structural reforms could work in tandem, creating a virtuous cycle of faster growth and more efficient public spending.

Georgieva further noted that through sound policies, the adoption of the euro could strengthen both Bulgaria’s economic dynamism and its resilience, thanks in part to new safeguards recognized by credit rating agencies. Joining the euro system would allow Bulgarian banks to access liquidity support from the European Central Bank through main refinancing operations and, in emergencies, through the emergency liquidity assistance mechanism. Moreover, euro adoption would enable Bulgaria to join the European Stability Mechanism – the world’s largest regional financial arrangement – and the country should do so without delay, she stressed.

She also referred to Bulgaria’s broader commitments to Europe. First and foremost, she said, the country had a duty to address its own weaknesses, especially in governance, while Europe bore a responsibility to insist on genuine progress.

Bulgaria’s second obligation, she continued, was to actively promote deeper economic and financial integration in Europe – with renewed determination given the current period of profound global uncertainty. The world was undergoing significant transformations driven by shifts in geopolitics, trade, demographics, and technology, she said.

Georgieva added that it was not enough for the European Union to remain merely a zone of wealth, education, and talent while accepting real GDP growth of barely above 1 percent annually, as too many of its best ideas and a large share of its savings continued to flow abroad, benefiting others.

She warned that Europe’s progress in restoring dynamism and improving competitiveness was far too slow, noting that this was most evident in the incomplete European Banking Union – an area essential both for private cross-border risk sharing and for the transmission of monetary policy. She said that while some countries had subjected their banking systems to the high-quality supervision of the Single Supervisory Mechanism, they had not received the expected cross-border banking benefits in return. Other host countries still distrusted larger jurisdictions, while some remained deeply attached to inward-looking banking structures. All of this, Georgieva said, had to change.

She concluded by saying that newer EU member states like Bulgaria, whose banking systems were less developed, should position themselves as drivers of change – actively advocating for the creation of a unified European savings and investment union.

/KK/

Additional

news.modal.image.header

news.modal.image.text

news.modal.download.header

news.modal.download.text

news.modal.header

news.modal.text

By 00:32 on 07.11.2025 Today`s news

This website uses cookies. By accepting cookies you can enjoy a better experience while browsing pages.

Accept More information