PM: Bulgaria's Eurozone Quest Will Begin in January

Prime Minister Boyko Borisov has ended months of speculation by confirming Bulgaria's intention to apply for Eurozone membership at the end of January. Photo by BGNES

Bulgarian Prime Minister Boyko Borisov has declared that entry to the Eurozone is now the country’s top foreign policy priority.

"We have everything in order and we're ready to start the road to the euro zone by the end of the month," he stated in an interview on Sunday, before the opening of the first GERB conference since the new government came to power.

The Premier's statement has ended months of speculation by politicians and economic experts as to whether Bulgaria would formally apply to join the Eurozone.

Borisov confirmed that Bulgaria would make an imminent application to be admitted to the European Exchange Rate Mechanism (ERM), a two-year currency stability test for candidate countries.

If Bulgaria succeeded in gaining the approval of the European Central Bank President Jean-Claude Trichet and the heads of state of the present Eurozone, it would remain on course to adopt the Euro in 2013, ahead of Romania and Hungary.

Borisov acknowledged the current economic difficulties, and said he was concerned that a debt recession and an intensifying debt crisis might be an obstacle to new ERM candidates such as Bulgaria.

This view has been echoed by the Confederation of Bulgarian Employers and Industrialists. "It makes sense for Bulgaria to apply, but I worry that at a time of crisis the European Central Bank could postpone the application on a technical point because they want to consolidate," commented Ivo Prokopiev, chairman of the group.

In a related move, PM Borisov stated that he would broaden the powers of his Finance Minister, Simeon Djankov, by adding increased supervision of the real economy to his treasury portfolio.

Borisov also confirmed that Bulgaria would not need to approach the International Monetary Fund (IMF) for emergency financing to cover budget deficits. There has also been speculation that the country will revise upwards its forecast for 2010 GBP from a small contraction to a 0,2% expansion.

In a concluding cautionary comment, Borisov warned that: "If fiscal discipline is still hitting people really hard in the years ahead, then we'll have to reconsider our approach," he said.

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