site.btaUPDATED Deputy PM Pekanov Discusses Euro Changeover on Croatia Visit's Last Day

Croatian citizens, businesses and institutions want to be at the heart of Europe and see the upcoming adoption of the euro in that country as a mechanism for guaranteeing this, said Deputy Prime Minister for EU Funds Management Atanas Pekanov, quoted by the Council of Ministers in Sofia on Tuesday, which was the last day of his two-day visit to Croatia. 

The general response to Croatia's preparations to join the euro zone on January 1, 2023 is positive, which is the result of the successful coordination of the process by all the institutions, Pekanov said.  

Pekanov and his team conferred with Croatian Prime Minister Andrej Plenkovic, Croatian Central Bank Vicegovernor Michael Faulend and Finance Minister Marko Primorac. 

"At the meeting, Prime Minister Plenkovic stressed the advantages of deepened integration into the EU in these times of trouble for the world. We concurred that the euro adds to stability and trust in the country," Pekanov told BTA after the meeting.

"The whole euro changeover process can only succeed if the institutions' operation is synchronized and goes in the same direction. Besides this, the whole process, including the possible risks, should be clarified to the public," the Deputy PM added.

He pointed out that both sides laid a special emphasis on cooperation between Sofia and Zagreb, both regarding the euro and the two countries' admission to the Schengen area and to the Organisation for Economic Co-operation and Development (OECD).

Another point on which Pekanov and Plenkovic were unanimous was that precisely in the present difficult times of economic uncertainty for Europe, the European institutions and the euro can serve as an "anchor of stability" for building trust in the individual Member States.

"During those two days we saw for ourselves that the euro adoption process can be successful, and people and the business community can see its benefits. In this situation, the euro can be an additional stimulus to reforms in the country, but it also requires a number of economic measures to safeguard citizens," the Deputy PM also said.

"Talking with business persons and with members of the public, we didn't hear any concerns about the euro changeover in Croatia. They all said that the inflation rate is high but do not blame the euro directly for this. This is the case because the public is aware of the existence of safeguard mechanisms, including an awareness campaign underway that is intended to explain the whole process," Pekanov pointed out.

"As a caretaker cabinet, we are responsible for preparing the technical processes that are set forth in the National Euro Changeover Plan which the regular government adopted," the Deputy PM said.

"This is important so that this country should be prepared when a regular cabinet takes over and decides to send the request for Bulgaria's accession to the euro zone. The decision on accession must be taken by a regular cabinet, but we must not waste any time, on the contrary, we must tap the other countries' experience," he emphasized.

Commenting on his session with Croatian Central Bank Vicegovernor Michael Faulend, Pekanov said that they discussed in detail the technical aspects of joining the euro zone, such as the timeframe for transition from one currency to the other and the period of time during which the kuna will be exchanged at the local banks. 

Croatian Finance Minister Marko Primorac familiarized the Bulgarian delegation with some of the safeguard mechanisms that his country had introduced in connection with the kuna-euro changeover. One such mechanism is price tags in both kuna and euro. Another mechanism is a possibility for people to alert the authorities about irregular price rises after the adoption of the euro, which can be done on an expressly provided website and phone line, Pekanov said. Twelve institutions will be monitoring this process.

The public is also informed of the decision-making process at the European Central Bank and how Croatia will be sharing in it. "In the case of Bulgaria, we must implement these decisions because we are not full members of the euro zone but have a currency board arrangement pegging the lev to the single currency," the Deputy PM specified.

"All this, along with the country's entry into the Single Supervisory Mechanism, resulted in building trust in the country after the final decision on Croatia's accession to the euro zone was made public. Precisely this is indicated by the two-rung upgrade of the country's credit rating, which will lead to lower interest rates and better borrowing conditions," Pekanov went on to say. 

The drafting of a euro changeover law was also discussed during the talks at the Croatian Finance Ministry.

"Our euro law will specify exactly how the transition to the single currency will take place. In Bulgaria, it is planned that the lev could be used for one month after the euro has been introduced. Then, within six months, the national currency will be exchangeable at commercial banks and post offices, so as to make sure that citizens will have access to that in all parts of the country. After the end of this period, the Bulgarian National Bank will be exchanging levs for euro indefinitely," the Deputy PM pointed out. 

He added that a working group for the euro adoption bill has already been formed, but the caretaker cabinet will not submit the draft legislation to the National Assembly.