EU MP: Bulgaria Should Adopt Euro as Crisis Protection

Bulgaria in EU | November 27, 2009, Friday // 14:20|  views

A European parliamentarian proposes that Bulgaria should adopt the Euro alongside the Lev, to increase stability in the current economic crisis. Photo by BGNES

Guy Verhofstadt has proposed that Eastern European countries, including Bulgaria, should adopt the Euro as a protection against the economic crisis.

Verhofstadt, leader of the liberal group in the European Parliament, has made the suggestion on Thursday. His proposal covered eight Central and Eastern European countries that have been badly hit by the crisis, including Bulgaria and Romania.

"East and Central European governments may want to explore the possibility of introducing the Euro as a joint legal tender. The Euro would function alongside national currencies for all transactions and thus enhance the credibility of the exchange rate arrangement," Verhofstadt stated.

On the same day, PM Boyko Borisov had announced, in a speech to the Bulgarian Economic Forum, that the country could not consider full membership of the Eurozone while its state budget remained in deficit.

Verhofstadt’s proposal, however, emphasizes that the Euro would run alongside the national currency, rather than fully replacing it, as a short-term stability measure.

The idea of introducing the Euro early in Eastern Europe is not new. Last April, a leaked IMF report making such proposals was broadly rejected by economists from Central and Eastern European countries.

A spokesperson for Vehofstadt stated that the main difference from earlier proposals was that countries would keep their national currencies, and that therefore the Exchange Rate Mechanism would not be undermined.

The plan also proposed that the European Central Bank should temporarily provide liquidity to Eastern EU countries' local banks. This support - currently available only to Eurozone banks - would help fuel investment and consumption.

Reacting to this initiative, the European Parliament has decided to hold a debate during its next session in Strasbourg (December 14 - 17) on the particular economic and financial difficulties experienced in Eastern and Central European member states that are not yet members of the Eurozone.

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Tags: European parliament, Guy Verhofstadt, Eurozone, Bulgaria, Romania, Boyko Borisov


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