Bulgaria C-Bank Governor Slams 'Guilty Greeks, Innocent Germans' Propaganda

Finance | September 16, 2011, Friday // 16:59|  views

Ivan Iskrov (L), governor of Bulgaria's national bank, is pictured here along with the European Central Bank Governing Council member Jose Manuel Gonzalez-Paramo (R) at the opening of the Euro Exhibition in Sofia. Photo by BGNES

Bulgaria's national bank governor has advised against simplifying the crisis that is wreaking havoc in the eurozone, saying it is not just a matter of "guilty Greeks and innocent Germans".

"Europe badly needs the spirit of solidarity. Politicians and economists should stop beating around the bush, which is very evident in the countries in the heart of Europe. Europe needs solutions," Ivan Iskrov said in a speech, marking the opening of the Euro Exhibition at the Bulgarian National Bank.

This is the first time that Bulgaria's capital Sofia hosts the exhibition, organized by the central bank and the European Central Bank. The inauguration was also attended by the ECB Governing Council member Jose Manuel Gonzalez-Paramo.

Sofia is the eleventh city hosting the exhibition. Before that it was displayed in Frankfurt, Bratislava, Barcelona, Rome, Berlin, Luxembourg, Warsaw, Tallinn, Bucharest and Paris.

Jose Manuel Gonzalez-Paramo pointed to the current challenges facing some members of the euro zone as evidence that sustainable convergence of national economies is important.

"The decision to adopt the euro is a very fundamental one and should not be taken lightly," Gonzalez-Paramo said in his speech at the inauguration. "Very careful preparation is required to ensure that convergence is sustainable and participation in the euro area is successful."

According to Jose Manuel Gonzalez-Paramo appropriate economic policies should be applied not only before but also after the adoption of the euro.

"Appropriate economic policies are necessary not only before but also after the adoption of the euro," he added. "The challenges that some euro area countries are currently facing illustrate the importance of sustainable convergence very clearly."

He forecast that Bulgaria will adopt the single currency at some point in the future, just like all other member states that don't have the right to withdrawal included in their contracts.

"It is high time that the European Union turns its back on all wars. The crisis is not just about guilty Greeks and innocent Germans," Iskrov said, adding that Bulgaria is an exemplary model, to be followed by the members and aspirants to the eurozone.

In his words Bulgaria is synonymous with the words "stability" and "calmness".

"This year Bulgaria will definitely demonstrate that its budget deficit falls below the European Union's ceiling of 3% of gross domestic product in line with the Maastricht criteria," the governor said.

Meanwhile surveys has shown that public support for Bulgaria's eurozone membership has been seriously dented over the last few months following the troubling developments in the monetary union.

While at the end of last year the Bulgarian society was cut in two over calls for immediate introduction of the European single currency, recent surveys by the Open Society Institute and Transatlantic Trends 2011 have found out that those who oppose euro adoption now are a huge majority.

At the same time the Currency Board regime in which Bulgaria operates enjoys great public support, it is one of the most trusted institutions. The people prefer to use the lev instead of switching to the euro, even though the local currency is pegged to the euro.

Bulgaria's current center-right government however has consistently pursued European integration with enormous zeal and has made clear that the single currency woes and doomsayers' warnings of a possible crack-up will not give it a pause.

Finance Minister Simeon Djankov recently offered a rare vote of confidence in the single currency's long-term future, saying in an interview for the Wall Street Journal that the country remains committed to adopting the euro as quickly as possible.

According to him recent developments—specifically the government's progress in passing new fiscal-stability legislation and a cooling of calls for euro-area tax harmonization—had assuaged Sofia's concerns, meaning talks could restart in months.

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