Bulgaria Takes Stride Toward Eurozone Entry with New National Bank Law

The majority in Bulgaria's parliament has given the green light to the first reading of a new law governing the Bulgarian National Bank (BNB), marking a pivotal moment in the country's journey toward Eurozone accession. The legislation, if passed, will play a crucial role in facilitating Bulgaria's entry into the Eurozone.

The proposed amendments address key aspects, including the status of the euro as a monetary unit, the design of the national side of exchangeable euro coins, and the release and withdrawal of euro banknotes and coins. Notably, the law explicitly outlines the types of assets and instruments in which the reserves of the Bulgarian National Bank can be invested.

However, not everyone is in favor of the new legislation. Vazrazhdane has raised objections, with Deputy Tsoncho Ganev emphasizing the need to preserve the independence of the bank. Ganev cautioned against allowing the Bulgarian National Bank to become a mere extension of the European Central Bank, stressing the importance of maintaining its autonomy.

The adopted texts in the first reading aim to address legal inconsistencies pointed out by the European Central Bank and the European Commission. These discrepancies pertain to various aspects, including the legal framework of monetary policy, statistical data collection, management of international currency reserves, payment systems, issuance of banknotes, choice of independent auditors, financial reporting, exchange rate policy, and international cooperation.

The comprehensive overhaul of the law on the Bulgarian National Bank is anticipated to be in place upon Bulgaria's official entry into the Eurozone, replacing the existing legislation. The parliamentary process includes a provision for submitting proposals within a 5-day timeframe between the two readings, indicating a dynamic legislative progression.

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