Ex-FinMin Djankov: Bulgaria Unlikely to Adopt Euro Soon

Opinions | July 3, 2016, Sunday // 14:43|  views

Simeon Djankov, former Finance Minister of Bulgaria. File photo, BGNES

Former Bulgarian Finance Minister Simeon Djankov has warned a British withdrawal from the EU could leave Bulgaria and Southeast Europe out of the agenda for the next several years.

"There is nothing positive" for Bulgaria in the aftermath of the referendum, in Djankov's view.

In an interview with private bTV broadcaster, he has opined that the move will result in a slowdown of political and economic integration across the bloc.

The Energy Union concept will also be "irretrievably lost" for the next 4 or 5 years, he has added.

"This is a big blow to Bulgaria, given our geopolitical orientation, and given our former - and quite unsuccessful - attempts and handling our energy policies."

Djankov was known as the mastermind behind the austerity policies of the early 2010s and gained for Bulgaria the fame of a "paradise of fiscal discipline" across Europe, gaining mixed reputation inside the country.

It is the EU Commission to blame for the outcome of the Brexit referendum as it failed to communicate the benefits of the single European market, he has also argued.

He has also voiced skepticism about the prospect of Bulgaria swiftly adopting the single European currency, in line with plans reportedly backed by EU Commission President Jean-Claude Juncker.

In his words, Bulgaria's place is within the Eurozone, but it is unlikely for the country to adopt the euro within the next 3-4 years due to the increased levels of debt, slow economic growth, and the developments of 2014 when Bulgaria adopted a course heading "away from the Eurozone" and causing it to lose valuable time.

"Much higher growth will be needed, around 4-5%, to deliver on the formal debt and deficit criteria in a sustainable way," he has added.

Bulgaria operates a fixed exchange rate mechanism called currency board, which curbs the conduct of independent monetary policy by the country's central bank and the pegs the national currency, the lev (BGN), at 1.95583 per euro.

Last year, Bulgaria’s government set up a council to propose a date for adopting the euro and draft a plan for introducing the single currency. The lev is not yet within the Exchange Rate Mechanism (ERM II), the euro's "waiting room".

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Tags: Simeon Djankov, Brexit, euro, ERM-II, energy union, UK, Britain, Eurozone, Jean-Claude Juncker


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