The European Commission’s Representation in Bulgaria held another initiative named Citizens’ Dialogue. Deputy President of the European Commission Valdis Dombrovskis in charge of the Euro, Social Dialogue, Financial Stability, Financial Services and Capital Markets Union took part at the event. Bulgaria’s Deputy Prime Minister Tomislav Donchev, who served as Minister for European Funds and Economic Policies in GERB’s former cabinet also took part at the discussion. The Citizens’ Dialogue event is held in many EU countries. The forum allows people to share their opinions and discus topics of public interest.

According to data of a research of Gallup International in the beginning of 2018 48% of the Bulgarian citizens were against the adoption of the Euro and 46% of the surveyed nationals approved the adoption of the Euro as official currency in Bulgaria. According to the skeptics, the adoption of the Euro in Bulgaria would result in higher prices and bigger inflation. The EC Deputy President Valdis Dombrovskis attended the meeting with the Bulgarian citizens, in order to clarify some of the parameters related to Bulgaria’s accession to the Eurozone:

“It is clear that Bulgaria wants to move forward.Its Presidency is steering the EU through now a vital couple of months. It is no coincidence that Bulgaria, your Presidency, stands for three very important"B"s: Bbudeshte ,Budget and the Balkans. The Commission is here to support you to get you with a second foot in the euro area as well. President Juncker has made it very clear: the EU wants to support countries in their efforts to join the euro area. We stand with Bulgaria with this and we are ready to help you get ready for this. One issue is political support. But we also offer a new 'convergence facility' or, in other words, technical and financial assistance to make the adjustments needed. Politically too, euro membership puts countries at the very core of the European Union. The road to the Eurozone is long and difficult, but it is worth the efforts. In fact, in economic terms, there are clear benefits of the euro area: it lowers barriers for businesses, it can reduce interest rates, it brings a positive impact on growth as a result of full integration into the single market, and stronger growth eventually leads to higher living standards in the country. In order to enter the Eurozone each country has to overcome its fears, make the necessary efforts and demonstrate leadership at all levels of governance, to reach economic growth and balanced budget.We see much strength in Bulgaria to have robust economic growth, way above EU average and solid fiscal policy, a balanced budget, one of the lowest public debt levels in the EU at 26% of GDP and going down, but of course there is still further work needed. For example, joining the euro also implies becoming part of the Banking Union, and in that sense there is further work in strengthening banking sector.”

The European Banking Union was established in 2012 as a response to the Eurozone’s debt crisis. One of the main purposes of the banking union is to provide banking supervision, in order to reduce the possibility of insolvency. The European Banking Union has mechanisms for timely intervention and guarantees that in case of possible bankruptcy of a given bank, the bank’s creditors and shareholders will pay first. Thus, the refinancing of the banks will not be done at the expense of the taxpayers. It also boosts the confidence of the European citizens in the banking sector and the Euro as a currency.

Bulgaria has reached a good level of preparedness to enter the Eurozone’s waiting room (the ERM II mechanism), Valdis Dombrovskis said and added:I would say the preconditions are there: since the inception of our single currency, the exchange-rate of the lev has been pegged to the euro; you can choose to have your bank savings in euro. So in many ways you are already with one foot in the euro area.. We saw macroeconomic imbalances in Bulgaria until recently, but the country’s indicators have been improving. There is strong economic discipline in this country and it meets all Maastricht criteria. Your banking sector has good liquidity. Bulgaria does well in persuading its European partners and it seems that this country will soon manage to catch up with the other member states. The accession of Bulgaria in the Eurozone is up to the European Central Bank and the Economic and Monetary Union of the EU, but I believe that within one year Bulgaria can enter the ERM II mechanism.

At the end, Valdis Dombrovskis tried to calm the citizens’ fear related to possible negative consequences that may stem from the adoption of the Euro in Bulgaria. The benefits are bigger if the process is managed by the Ministry of Finance. In Latvia for instance it happened through a memorandum for fair adoption of the Euro by the local business. The single European currency is not a panacea and the countries are not released from the liability to conduct a rational fiscal policy. The rules of the EU apply to all countries and we are advising the EU countries to increase employment and incomes and meanwhile reduce taxes and low-paid labor.

The single European currency offers undisputed benefits to the countries. Expenses for financial operations in the member states who adopted the Euro are less. Membership in the Eurozone also makes travels easier. The Eurozone is a good development environment for the Bulgarian citizens. The European Union will also benefit from Bulgaria’s accession to the Eurozone, Bulgaria’s Deputy Premier Tomislav Donchev said at a meeting with the Bulgarian citizens.

English version: Kostadin Atanasov