EU political leaders discourage Bulgaria for early eurozone entry.

By bne IntelliNews February 15, 2010
EU political leaders sent a discouraging massage regarding the countrys ambition to adopt the single currency in the next 2 to 3 years. This became clear in a statement of PM Boyko Borisov in a TV programme on Friday night. This message was communicated in talks with ECB president Jean-Claude Trichet, Germany s Chancellor Angela Merkel and France s President Nicolas Sarkozy. This confirmed our expectations that political support for admitting a new euro area member in the face of a struggling government in neighbouring Greece to regain control over its finances will be insufficient for a successful Bulgarian application. However, it is still possible, and we believe beneficial, for the country to apply for the first phase of the accession to the monetary union, i.e. membership in the exchange rate mechanism (ERM II). In the ERM II the country has to maintain a stable exchange rate to the euro for at least 2 years, which in conditions of currency board will not pose any challenge. In the meantime, providing a clear objective for euro adoption would anchor expectations regarding fiscal and monetary policies of the government.          

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