Economist: Bulgaria Faces Two-Year Wait for Eurozone Inclusion

Novinite.com
8 Jul 2024

Bulgaria is unlikely to join the Eurozone in the next two years, according to economist Prof. Krasen Stanchev, founder of the Institute for Market Economy. He explained on bTV's morning program "This Sunday" that the decision is made not by the European Commission or the European Central Bank, but by a qualified majority of Eurozone member countries. These countries must believe that Bulgaria respects its commitments, which Stanchev sees as improbable in the near future.

Stanchev noted that Bulgaria will meet the inflation criterion by the end of the year, which is a quantitative measure. However, he highlighted that there are also qualitative criteria and those related to the rule of law. One significant comment from the convergent report was that the proposed constitutional change allowing a governor or deputy governor of the Bulgarian National Bank to be an acting minister violates an EU treaty article prohibiting central banks from political consultations.

He also pointed out that Bulgaria has experienced the highest salary growth in the EU and Europe since 1999. According to the "remuneration to GDP" indicator, Bulgaria is ahead of other countries, with this year's GDP expected to be a little over BGN 200 billion, of which around BGN 110-115 billion is people's income, making up 55% of GDP. For comparison, this level is just under 70% in Switzerland and about 60% in Austria and the Netherlands.

Stanchev explained that rising prices are due to a lack of competition among sellers and producers, as well as government announcements that signal an increase in incomes, prompting the commercial sector to raise prices.