MPs warn political instability jeopardises Bulgaria's euro adoption timetable

MPs warn political instability jeopardises Bulgaria's euro adoption timetable
/ bne IntelliNews
By bne IntelliNews October 29, 2022

Bulgarian MPs urged the caretaker government to accelerate talks with European institutions to enable the adoption of the European single currency on January 1, 2024 in a resolution adopted by the parliament late on October 27. 

Bulgaria set January 2024 as the target date for joining the eurozone, but progress has been stalled by the political uncertainty in the country after two years of repeated snap general elections. After the latest election on October 2, there is not yet any indication of a new government being formed. 

157 MPs backed the resolution put forward by Gerb, the winner of the recent election, while 28 voted against and 23 abstained, a parliament statement said. Change Continues, the second-largest party in the new parliament, also backed the resolution. 

“The Council of Ministers, in co-ordination with the [Bulgarian National Bank] BNB and other responsible institutions, to accelerate the process of technical preparation for the adoption of the euro according to the National Plan for the introduction of the euro in the Republic of Bulgaria, adopted by the Council of Ministers on May 27, 2022,” says the resolution adopted by the parliament. 

Addressing the parliament on October 27, central bank Governor Dimitar Radev said the political decision on joining the eurozone “will have its price, and it will not be small”. 

Radev urged MPs to focus on resolving the political crisis and to address questions directly related to preparing for euro adoption, including when Bulgaria will have a budget, a macroeconomic forecast and a medium-term fiscal programme and with what parameters.

The country was admitted to the eurozone’s waiting room, the ERM II mechanism, in July 2020 along with Croatia. However, political instability has delayed Sofia’s plans for euro adoption. 

Bulgaria’s former government, led by Change Continues’ Kiril Petkov, adopted on May 27 a plan for introduction of the euro on January 1, 2024. 

When announcing the plan’s approval, then finance minister Assen Vassilev noted that the country had de facto already adopted the euro, as its currency, the Bulgarian lev, is pegged to the European currency.