site.btaCentral Bank Governor Radev: Bulgaria Well-Positioned for Eurozone Entry

Bulgaria is well-positioned to join the Eurozone, having met all the nominal criteria for euro adoption, including the inflation and budget deficit requirements, said Bulgarian National Bank Governor Radev at an event organized by the American Chamber of Commerce in Bulgaria and the British-Bulgarian Chamber of Commerce on Tuesday in downtown Sofia.

The event, focused on the topic Financial Policy and Competitiveness of the Bulgarian Economy, highlighted the potential for eurozone membership to act as a counterbalance to the negative processes in the global economy. Radev described this membership as a top economic, political, and financial priority for Bulgaria.

He noted that the final phase of Bulgaria’s preparations for eurozone entry has been relatively smooth and may mitigate the effects of global uncertainties. “From a logistical and technical perspective, both the Bulgarian National Bank and the banking sector are fully prepared for the exchange process and for operating within the eurozone,” Radev said. “With the latest amendments to the BNB Act in March, the legal convergence process was completed.”

Radev added that since the beginning of the year, Bulgaria has consistently met the price stability criterion. “The 2024 budget, which we expect to be announced later this week, remains within the planned deficit. As for exchange rate stability, debt-to-GDP ratio, and long-term bond interest rates, we traditionally meet these criteria with a significant positive margin,” he said.

According to Radev, these developments place Bulgaria in a solid starting position for eurozone accession. In a climate of global uncertainties, membership in strong alliances such as the eurozone becomes even more vital. He pointed to “deep, multi-layered positive effects” on competitiveness and on the country’s medium- and long-term economic outlook.

In the short term, Radev anticipates better access to and lower financing costs for both the public and private sectors. “This is mainly due to two factors: the expected upgrade of the country’s credit rating and the reduction of banks’ minimum reserve requirements,” he explained.

Over the longer term, Radev said, eurozone membership promises greater price and economic stability, key factors in a complex geopolitical environment. “All these elements would improve Bulgaria’s appeal as an investment destination, creating conditions for accelerated investment activity and higher potential GDP growth. Therefore, our upcoming accession to the eurozone is not merely an important step in our European integration; it is a strategic opportunity for boosting competitiveness and the country’s long-term economic potential,” he said.

He went on to emphasize that these positive effects, both short- and long-term, will fully materialize only if Bulgaria pursues prudent macroeconomic policies, restores discipline in public finance management, and implements long-postponed structural reforms. “For Bulgaria, the final stage of the eurozone accession process and effective membership hold tremendous potential to counteract negative global trends, making the eurozone a foremost economic, political, and financial priority,” Radev said.

Finance Minister Temenuzhka Petkova also spoke at the event, which began with brief remarks by the American Chamber of Commerce in Bulgaria Chief Executive Officer Ivan Mihaylov and British-Bulgarian Chamber of Commerce Executive Director Desislava Miteva.