site.btaDeputy PM Pekanov on Pros of Euro Adoption, Warns about Forces Trying to Sabotage Process

Caretaker Deputy Prime Minister for EU Funds Management Atanas Pekanov listed in a Facebook post the pros of adopting the euro and warned that various forces will try to sabotage the process. 

"Since the beginning of my term as caretaker deputy prime minister I have consistently defended the position that Bulgaria should continue working and fighting to enter the eurozone with the currently set target date - January 1st 2024," Pekanov argues.

According to him, the successful development of the country in the 21st century can only be achieved in cooperation with the other European countries. "It is necessary for us to be part of the major alliances, to have the opportunity to defend our position there and to take the decisions, instead of just enforcing others'. We need to be architects of our own economic policy, not just users of it. In this sense, membership of the euro area should remain a strategic goal for Bulgaria".

"We live in turbulent times. Various forces will try to speculate and sabotage the process. I believe that at the elections held a month ago, Bulgarians reaffirmed our desire for closer cohesion and active participation in the European processes. I hope that the pro-European forces in the National Assembly will react in time to overcome these speculations and to show that the majority support this path for Bulgaria," Pekanov says.

For a small, open economy, which otherwise is just floating along the current of the global economy, joining the second most used currency in the world can serve as an anchor of stability. This has its undoubted pros, including increased security through stronger monitoring, boosting export sectors and tourism, full access to financial markets and the global financial infrastructure, elimination of transaction fees, more transparent incomes, improved credit ratings and consequently lowering interest rates on sovereign debt, he says, adding that this is important because it has a direct impact on government spending - millions of leva a year that are paid to international banks in higher interest rates can be invested in healthcare and education. 

"I hear calls to reconsider our choice. At their core, these calls deep down want to convince us that Germany, France, Spain, Italy, Slovakia, Slovenia - they all got it wrong when they adopted the common currency, that it was a mistake and they do not know what they are doing. I am sure that make-believe experts and public figures of questionable reputation can be found, who will be saying this all day and every day. But I am also sure that the majority of Bulgarian citizens do not believe in this argument. For this reason, we need clear actions and to continue the accession process," he says, adding that delaying the process of the euro's introduction entails great risks, especially in the coming years of financial turbulence and tightening financial conditions at the global level.

"Is the euro area perfect? No, it is not perfect. It is not yet a complete monetary union. For years in academia, and personally in my expert work, we have focused on making the common currency institutionally stronger," he says. Such steps have been taken in the last two years - both the adoption of the Recovery and Sustainability Mechanism and the European Central Bank's unconventional measures to strengthen common responses rather than leaving each country to fend for itself. Further integration, structural changes to the Economic and Monetary Union and the sharing of crisis risks are key steps that made the common currency stronger and more resilient. It is this improved institutional architecture that makes Bulgaria's membership in the euro area even more meaningful, Pekanov notes.

"Our country has been committed to adopting the euro since it joined the European Union. The last two regular governments have taken important steps in this direction. In 2020, we became a member of the ERMII currency mechanism, which represents the de facto decision starting the final process. The time for analysis was prior to that. In Croatia, the analyses were made in 2017 and clearly set the direction for the country's entry into ERMII - the step after which entry into the euro area logically and inevitably follows". 

The regular cabinet of Prime Minister Kiril Petkov adopted the national plan for adopting the euro, which is the framework of the technical processes of preparation. "We have received a positive opinion from the Economic and Social Council, which is in a way the country's citizens' parliament, where employers, trade unions and civil society are represented. It is gratifying that all the social partners are behaving constructively and maturely on this issue. At the end of last week, an academic monograph by a number of Bulgarian economists and representatives of the Department of Economics was presented in Sofia University, which sets out Bulgaria's path to membership in the eurozone, highlighted the main pros of joining it and discusses how to avoid or address possible risks to citizens," the Deputy PM recalls. 

"Here and now, we must not let this process stall, especially in an uncertain world, where it is crucial to move together with strong alliances and benefit from common solutions, rather than being alone and left to the high and low tides of global economic cycles," says Pekanov.