site.btaUPDATED Bulgarian National Bank Bill Passed on Second Reading

On Thursday, Parliament adopted conclusively at second reading the Bulgarian National Bank (BNB) Bill, which aims to ensure the legal integration of the country's central bank into the Eurosystem as Bulgaria joins the euro area. It is envisaged that it will enter into force on а date specified in a Decision of the Council of the European Union on Bulgaria’s euro adoption.

The bill defines the status of the euro as legal tender, establishes the design of the national side of the euro coins, and regulates the release, withdrawal, replacement, exchange, and reproduction of euro banknotes and euro coins. It will also remedy the legal inconsistencies identified in the convergence reports of the European Central Bank and the European Commission.

The bill foresees no amendments to the current legislation regarding the election procedure for the composition of BNB's Governing Council. The BNB Governor will continue to be elected by the National Assembly. The deputy governors of the Issue, Banking and Banking Supervision departments of the BNB will also be elected by Parliament on the Governor’s proposal. The other three members of the Governing Council will be appointed by the President as until now. The term of office of the members of the Governing Council shall remain six years.

The bill also regulates the management of BNB's non-monetary reserve assets that are not related to the Eurosystem's monetary policy and BNB's ability to manage foreign assets.

During the plenary debate, Vazrazhdane again expressed fears of rising prices and inflation in Bulgaria after joining the eurozone, as well as concerns about loss of sovereignty. MPs of the Bulgarian Socialist Party pointed out that Bulgaria was not yet ready to join the euro area.

MPs of Continue the Change-Democratic Bulgaria commented that it is ridiculous to talk about loss of sovereignty because Bulgaria is a part of a currency board arrangement. The ruling party also said that in 2023, when it joined the eurozone, Croatia has set a record for income growth in the EU and the effect of the euro on the inflation in the country was 0.2%.

There Is Such a People requested people who have been members of political parties in the past five years to not be able to be elected Governing Council members as of March 8, 2024. However, the proposal was not supported by the majority in Parliament. 

Vazrazhdane proposed the law to enter into effect in 2043, but their motion was also rejected by the ruling majority.