EC Vice President Dombrovskis Says Bulgaria Continues Work towards ERM II, Dismisses Speculations on Risk to Bulgarian Lev

Brussels, February 21 (BTA) - EU Commission Executive
Vice-President Valdis Dombrovskis Friday said that Bulgaria
continues to work towards ERM II, the waiting room for the euro
zone, and dismissed fears of risks for the Bulgarian lev. This
transpired from Dombrovskis's remarks for the press after he met
 with Bulgarian Prime Minister Boyko Borissov in Brussles.

"As regards Bulgaria's joining ERM II, we just had this
discussion and the Prime Minister was very clear that Bulgaria
continues to work towards ERM II. We discussed the state of play
 of implementation of commitments to ensure successful decision
on joining ERM II," said the EC Vice President.

He added that as regards commitments to the EC, "things are
broadly on track".

Dombrovskis said he "also discussed the state of play concerning
 the bank recapitalization because it is one of the things that
still needs to be done".

Following an asset quality review by the European Central Bank
in 2019 as a result of Bulgaria's application to enter ERM II,
capital shortfalls were identified in two banks: FIBank and
Investbank, and they were told to take measures to deal with the

Dombrovskis said: "Of course, we duiscussed the many
speculations concerning the exchange rate. I can only reiterate
that it is highliy unlikely that there will be any other
exchange rate than the current exchange rate according to which
the lev is fixed to the euro. There is no precedent for the
contrary and there is no economic logic to ask for a different
exchange rate, and it is going to be the exact same exchange
rate that Bulgaria has now."

Dombrovskis tweeted about his meeting with BoykoBorissov. "Glad
to see that
Bulgaria works towards joining ERM II and Banking Union is
broadly on track, important to complete bank recapitalisation.
EU Commission continues to support this effort."

Borissov said he told the EC Vice President that Bulgaria will
join the euro waiting room when there is full concensus. His
remarks made it clear that the government does not expect this
to happen before July. 

Previously, it was expected that Bulgaria would be joining the
euro waiting room in April.

Source: Brussels