site.btaEntry in Eurozone to Benefit Bulgaria, But Serious Reforms Needed Afterwards - Analysis

Joining the euro area will bring benefits, but there will be a need for serious reforms afterwards, according to an analysis by the Investment Institute at UniCredit Bulbank, prepared by economists Kristofor Pavlov and Elena Kostadinova. According to them, the next stage of economic development - reaching an average European standard of living - will require consistent structural reforms. Key priorities will be improving the institutional environment, fighting corruption and the shadow economy, better education and infrastructure, the bank said Friday.

These reforms, sometimes referred to as third-generation reforms, are related to: adapting to climate and technological challenges; reducing corruption and tax evasion; improving education, infrastructure and institutions; and strengthening the fight against inequality, which remains the highest in the EU (according to the Gini coefficient), the analysis reads.

The analysis reads further that Bulgaria has achieved 61% of the euro area average GDP per capita, up from just 34% in 2006. Similar progress has been made in terms of prices - from 44% to 56%.

The Baltic countries, which have achieved high competitiveness through productivity-enhancing reforms, are cited as an example of successfully managing such a transition.