site.btaUPDATED Government Approves National Euro Changeover Plan

The Bulgarian Government on Friday approved Bulgaria's National Euro Changeover Plan, Deputy Prime Minister and Finance Minister Assen Vassilev told a news briefing. He recalled that Bulgaria is scheduled to join the eurozone on January 1, 2024.

"This is an operational plan that sets clear deadlines and tasks to banks, payment and government institutions on how to handle the specific introduction of the currency and how to convert deposits and loans from BGN to EUR terms," Vassilev explained.

"This is a technical first step. A number of legislative amendments have yet to be made, including a revision of the Bulgarian National Bank Act," the Deputy PM said. He specified that further public and expert discussions will be held on this country's entry into the eurozone.
 
"Bulgaria de facto adopted the euro through the currency board arrangement because the lev is pegged to the euro," the Finance Minister added.

He was referring to a strict fixed exchange rate regime which Bulgaria established on July 1, 1997, pegging the lev at 1,000 per 1 Deutschemark. When the euro replaced the German currency, on January 4, 1999 the lev was anchored to the euro at a rate of BGN 1.95583/EUR 1.

Vassilev explained that in order to protect consumers, the prices of goods and services will be quoted in both leva and euro three months before the introduction of the single European currency and nine months after that. The idea is to prevent rogue traders from taking advantage of the conversion to inflate prices, he pointed out.

The government ministers representing the Bulgarian Socialist Party (BSP) voted against the National Euro Changeover Plan on Friday, the BSP said in a press release later in the day. The party argues that it reserves judgment until the central bank prepares an analysis of the effects of the changeover.

"We need this analysis so as to assess the consequences for Bulgarians' income, poverty and inequalities, as well as the impact on the economy and prices," BSP leader and Deputy Prime Minister and Economy and Industry Minister Korneliya Ninova said at Friday's Cabinet meeting. "We must make an informed and sensible decision, and today's one is not such," she concluded.