Handelsblatt: Eurozone May Benefit from Bulgaria's Accession

Finance | February 22, 2010, Monday // 19:57|  views

Accession of Eastern EU members might benefit the Eurozone, according to the Handelsblatt. Map by

Letting Poland, Bulgaria, or Estonia adopt the euro might have a positive effect on the stability and image of the single EU currency, according to the German paper Handelsblatt.

The Polish economy which once was a synonym for chaos and mismanagement has been utterly transformed to become the only EU economy generating positive economic growth in a time of recession, Handelsblatt points out as cited by the Bulgarian paper Dnevnik.

It adds that, likewise, Bulgaria which has long been regarded as very corrupt to the extent that its EU funding was blocked, is today the only EU member state meeting the Maastricht budget criteria.

Handelsblatt says that unlike Poland, Bulgaria, and Estonia, Latvia, Romania, and Hungary, which were saved from bankruptcy by IMF and EU bailout aid, would not be suited to join the Eurozone for a while.

The article points out that if Poland, the Czech Republic, Estonia, and Bulgaria join the Eurozone, this is only going to strengthen the common European currency. It contrasts these Eastern European states as posing less of a threat to the stability of the euro than Southern European states.

It says that the Eastern European countries are politically stronger oriented towards growth and budget discipline that the Southern European states, and that Poland, Bulgaria, and Romania can rely on an increasing amount of EU money to modernize their economies and infrastructure unlike Spain, Greece, or Portugal.

According to the Handelsblatt article, the adoption of the single European currency for countries whose currencies are pegged to the euro such as Bulgaria should happen quickly because of its benefits and few disadvantages.

In addition, foreign investors in the Eastern European states have counted on the fact that the respective countries would adopt the euro within shorter periods of time. It is also going to allow local producers to use their comparative advantages, while the euro is going to get a proof of its reliability badly needed for the financial markets.

The Handelsblatt article points out that the countries queuing to join the Eurozone should not be made to pay for the troubles of the Greeks or the Spanish.

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Tags: Eurozone, euro adoption, Handelsblatt, Poland, Estonia, Latvia, Czech Republic, Romania, Maastricht

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