30.06.2017

"The entry into ERM 2, the so-called "waiting room" of the euro area is the end of Bulgaria's integration in the EU. This will irretrievably position us firmly at the heart of Europe, which is rather a political aspect", says the Minister of Finance Vladislav Goranov in an interview for the Capital newspaper. The Finance Minister explains that talks are being held with all members as joining ERM 2 requires a unanimous decision from both the ECB and the euro area members.

"We do not yet communicate officially with the European Central Bank. We know that they are conservative, especially after the problems with Greece in the last couple of years, but we are convinced that the advantages of entering ERM 2, and subsequently the euro area, are more than the risks. In practice, on the eve of the 20th anniversary of the introduction of the currency board arrangement, the only instrument that could replace it is an euro area membership. And I think there is a political consensus among all political parties about this", Minister Goranov elaborates further. According to him, by the end of the year we should be aware of our prospects. "We will apply officially when we are certain that we will be supported", Minister Goranov says firmly.

Asked why it is right now that Bulgaria expresses its willingness to join the euro area, Vladislav Goranov answers that at the moment Bulgaria meets all reference criteria and that earlier, in 2014 and 2015, it was much more difficult to talk about this in the light of the recent banking crisis with the CCB (KTB) failure. Furthermore, we have registered some good economic growth in 2015 and 2016 in comparison to the average EU growth, and our expectations for the economy this year are becoming more optimistic than at the stage of drafting the budget at the end of 2016. The Finance Minister highlights that following the FSAP carried out by the International Monetary Fund and by the World Bank and following the bank asset quality review, the stress tests and the audit of the insurance and pension companies, we have much stronger arguments to claim that the financial system risks are behind us. Which provides better prospects in the talks with the ECB and with the other euro area members.

Asked how he sees the period of staying in ERM 2, the Minister answers that we are not going to be in a hurry and press our partners and that the advantages from entering the "waiting room" will be sufficient for us from a reputational point of view and in terms of giving some prospects to the country. With regard to the speculative comments that appeared in the media in connection with our foreign currency reserve and the euro area, Minister Goranov explains that "assuming that we enter the euro area, there will be no extra money to spend, as what is now owned by the government will be owned by the government in the future, too. By analogy, the minimum reserves of the banks will remain theirs. And the property of the central bank will continue being property of the BNB. Practically, the government will not have at a disposal an additional resource which it may dispose of and spend", Vladislav Goranov says.

You can read the entire interview of the Minister of Finance for the Capital newspaper here.