Bulgaria and IMF officials have agreed that joining the Exchange Rate Mechanism, the "waiting room" for euro membership, and adopting the common European currency can not be on the agenda at times of global economic crisis.

This statement was unanimously embraced during the Washington meeting of Bulgaria's Finance Minister Plamen Oreshraski with IMF First Deputy Managing Director John Lipsky and IMF Director of the European Department Marek Belka.

The IMF officials commented that the impact of the global financial and economic crisis went beyond initial forecasts and the global GDP is expected to drop by nearly 1% in the short term.

According to them Eastern European countries will be affected in the wake of the recession in the older EU member states and are likely to see a sharp drop in their GDP.

The officials also discussed fears of the weakening competitiveness of the Bulgarian economy amidst the devaluation of the currencies in some of the countries in the region.

The Bulgarian minister stressed that the government plans to offset the negative effects of this by sticking to a prudent fiscal policy and is ready to take steps to cushion the impact of the global crisis. Bulgaria expect have a 1% budget surplus in 2009 and plans to further curtail expenses, Oresharski said.

The comments come amidst IMF unofficial calls that central and eastern European countries consider scrapping their currencies in favor of the euro even without formally joining the Eurozone.

In a confidential IMF report, which leaked earlier in the month, the fund said the eurozone could relax its entry rules so countries could join as quasi-members, without European Central Bank board seats.

Bulgaria's entry in the eurozone, initially scheduled for 2010, has been set back for some time around 2012. Experts say it is conditional on continued fiscal prudence and lower inflation.

In fact, Bulgaria has yet to join the Exchange Rate Mechanism, the "waiting room" for euro membership, amid concerns about its inflation rates and external trade imbalances. Stricter application of membership criteria has also been a factor in the delay.

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