If Bulgaria does not quickly enter the eurozone, there is a risk of falling into a dangerous trap and staying in the “euro waiting room” for a long time, according to Sofia’s interim finance minister Rosita Velkova, quoted by Sega.

A few days ago, Velkova announced that Bulgaria was refusing to accept the euro from January 1, 2024 and that it already had 2025 as its target, as it did not meet the criteria, and then returned to the idea of ​​a postponement and said that the date of the transition to the euro is 2024 will be saved.

“It seems that there are analyzes that predict that the high inflation in Bulgaria, which is one of the obstacles, will decrease in the summer. Then we can ask the EC to make the same compromise for us as for the newest member of the eurozone, Croatia,” Velkova said.

In principle, inflation in the candidate country should not exceed the average value in the three eurozone countries where prices are the most stable. “In the case of Croatia, they excluded the three countries with the lowest inflation and said it met the price stability criterion. According to the forecasts, there is a possibility that in July, if we remove 3 or 4 countries with the lowest inflation, we will also cover the inflation criterion,” explained the Bulgarian finance minister, saying that the price situation is very dynamic and expectations are quite uncertain.

Another obstacle is the four unadopted laws – amendments to the Law on Trade, the Insurance Code and the laws on the National Bank of Bulgaria and on anti-money laundering measures. Velkova emphasized that everything is in the hands of the next National Assembly – if it has the political will to quickly introduce the euro, these four bills can be quickly adopted. She reminded that the majority in the previous parliament did not have such a will – the interim government, for example, made the necessary changes to the Trade Law back in October, but the deputies did not have time to adopt them.

If progress is made in the coming months, Sofia could ask Brussels for a convergence report in July. The document, which shows how close the candidate country is to joining the eurozone, was due to be drawn up by the European Commission in April, but the interim government refused to demand it.

“It makes no sense to demand a report now, because it is clear that we will be told “no”, – explained Velkova on Sunday, who received a lot of criticism for this delay. Economists and financiers reminded that in all international analyzes the prospect of joining the Eurozone was called a big plus for Bulgaria, and the postponement will have a negative effect, including in the reviews of credit rating agencies.If the outlook for Bulgaria as a credit recipient is revised downward, this will lead to an increase in interest rates on loans that the country takes on international markets and from partners.

“The three Baltic states, which have been in the waiting room for the eurozone for 7 to 11 years (Lithuania the longest), have asked for convergence reports and been repeatedly refused. We have decided that at the moment we are not ready and there is no point in trying, but if we make progress in meeting the requirements and if we ask for the convergence report in July and get a good score, there is a chance that Bulgaria will join the eurozone from 1 July 2024 year, according to the head of public finance.

She noted that this would be a precedent, because usually it is January 1, but it is not impossible. The theme was tested with partners from the EU.

Currently, the Ministry of Finance is intensively working on the state budget for 2023 and the macroeconomic framework for the period until 2025. And the news is not very good. Rosita Velkova admitted that at the beginning of the year, a large budget deficit will probably be established – within 6%. If public spending is not reduced, there is a risk that Bulgaria will be trapped in a permanent and serious excess of revenue over expenditure in the years to come as well. If this happens, there will be a new obstacle for Bulgaria’s admission to the euro zone, as the condition is that the budget deficit does not exceed 3%, the finance minister admitted.

The material was created with the support of Rador