site.btaGreek Media Analyst: Bulgaria Is Better Prepared for Euro Adoption than Greece Was

In an interview for BTA, Prof. George Pleios, analyst and lecturer in media sociology at the University of Athens in Greece, said that Bulgaria is much better prepared to adopt the euro than Greece was.

Pleios reported: "Since Greece adopted the euro more than 20 years ago, many changes have taken place. But before I start with the changes, let me point out some positive differences between Bulgaria and Greece. [...] Unlike Greece, Bulgaria is much better prepared for the introduction of the single European currency. What do I mean by that? For some time, Bulgaria has had dual pricing. Prices were displayed in both euro and leva. This made it more difficult for people to be cheated because they knew what the price was before and after the euro. This was not the case in Greece, which led to a sudden increase in the price of many goods. For example, a bottle of water that used to cost 50 drachmes would then sell for 50 cents. However, the difference is significant because 1 euro was equal to 347 drachmes, which means that the price increased more than three times." The professor said that many Greeks saw their income shrink.

Pleios continued: "The second difference is that the balance between the lev and the euro is much better than it was between the drachma and the euro, because in the past, the lev was pegged to the Deutsche Mark."

The professor warned of some possible negative consequences of the adoption of the euro, saying: "What happened in Greece, and I suppose will happen in Bulgaria too, is that interest rates on bank loans got lower. [If this takes place in Bulgaria] people will start taking out loans from banks. [...] It could lead to an increase in imports and a decrease in exports of local production at the national level. Other negative trends could also emerge. If this continues for several years, it could lead to an imbalance at the national level, with possible problems for the economy."

Pleios said that the economies of Greece and Bulgaria are alike in that they have certain structural problems. He said: "The introduction of the euro, which equalizes the economies of Germany, France, and other countries with a country that has structural problems, will lead to imbalance. Let us take Athens for example. During the crisis, many businessmen from Europe—Germany, the Netherlands, France—bought a number of buildings at very low prices. Now they have been converted into hotels and the like. Thus, this part of the national wealth now belongs to businesspersons from these countries. The same is happening in other tourist destinations in Greece."

The expert warned that problems may become evident in 5 to 10 years, and the people in power are aware of this. He added: "I am not convinced, however, that Bulgaria has taken sufficient measures to protect itself from Greece's bad experience. People remember that in 2010 Greece's external debt was very high. The country was unable to obtain loans from global credit institutions and had to request economic assistance from the European Union, the European Bank, and the International Monetary Fund. This led to very strict measures, which meant cuts in social policy and the state apparatus in Greece. Unemployment also increased, officially reaching 27%, but in my opinion, it was actually much higher. Unemployment among young people also reached very high levels, and they began to migrate to the US, Europe, and Australia. Perhaps around a million Greeks have migrated since then. The euro offers opportunities and possibilities, but it also harbours dangers. Every country that joins the eurozone must learn from the experience of other countries. Greece is the country that has perhaps suffered the most. Every country must take measures to address the negative consequences that could potentially arise."