site.btaFinance Forum Looks at Bulgaria's Opportunities, Challenges on Path to Eurozone
The prospects for the global, European and Bulgarian economy at a time of rising inflation, the opportunities and challenges facing Bulgaria on the way to the eurozone are among the main topics of discussion by the participants in the 14th edition of the Business Forum "The Noise of Money 2023". The event was organized by Profit.bg.
Former finance minister Assen Vassilev, who has been nominated again to this post in the Denkov-Gabriel cabinet, said that if his party's regular government is approved by Parliament, in two weeks they will draft a budget with a 3% deficit to meet the eurozone entry criteria. "Our friends in Croatia, when joining the eurozone, also failed to meet the criterion for the government debt-to-GDP ratio and I think we are moving on the right track", Vassilev said.
European Investment Bank (EIB) vice-president Lilyana Pavlova said that Bulgaria's postponement of eurozone accession brings damage and lost benefits. She noted that, by adopting the euro, investor confidence in Bulgaria will increase, while the risk premium for loans will decrease. Companies' costs for currency conversion, which are in the range of EUR 300-400 million annually, will also fall. "Commercial banks hold 10% asset reserves, but if we join the eurozone, the reserves will be only 1%, meaning BGN 15 billion will be freed for lending", Pavlova added.
Matyas Susec, head of the Policy Strategy and institutional relations department at the European Stability Mechanism, said that by joining the eurozone Bulgaria would have access to very well-developed European financing instruments, this would lower the cost of public debt and ease possible financial shocks. The credit rating increases from the moment the country enters the eurozone, he noted, adding that Bulgaria would become much more attractive to tourists if it was in the eurozone.
Lachezar Bogdanov from the Institute for Market Economics commented that Bulgaria has one foot in the eurozone and the other not, which creates long-term uncertainty. A step has to be taken to meet the criteria and enter the eurozone, otherwise the alternative is worse and risky, he said.