Bulgaria Approves EU Fiscal Pact ahead of Leaders' Summit

Bulgaria's Cabinet has given a green light to the country's accession to the draft EU Treaty on Stability, Coordination, and Governance in the Economic and Monetary Union.

Thus, Bulgaria will be one of the 25 EU member states to join the so called EU fiscal pact, with the UK and the Czech Republic deciding to stay out of it.

On Wednesday, the Bulgarian government authorized Prime Minister Boyko Borisov to sign the new EU document with the conditions for its ratification. Borisov is to take part in the European Council summit later this week.

Upon signing, Bulgaria will present a political declaration referring to the period before the country joins the euro zone on the application of part 4 of the EU fiscal treaty which refers to the coordination of economic policies, thus declaring a de facto Bulgarian opt-out from some provisions such as the harmonization of tax policies.

At the end of January, the European leaders approved the final text of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union or the so-called EU Fiscal Pact.

Bulgaria's decision states that in joining the Pact, Bulgaria should not assume fiscal responsibilities and will not coordinate its economic policy with the one of the countries in the Eurozone; will not harmonize taxes with the Eurozone, and will have a status of observer at meetings of Eurozone members.

Another condition is for the rules to be valid for the entire EU, without exceptions and parallel structures. The decision also states that Bulgaria will fully endorse the Treaty and will contribute to the European Stability Fund after joining the Eurozone.

The new EU Fiscal Pact will be signed on March 2, 2012, Friday, within the European Council meeting in Brussels.

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