There is no reason that prices go up or that inflationary shock takes place because of the euro launch, Krassimir Katev, Deputy Finance Minister said. According to him the new European currency can only have positive influence on the Bulgarian economy.

Bulgaria, without being a EU member state, is economically bound with the European Union, Katev pointed out.

The euro introduction will result in bigger prices transparency due to the reduction of the transactions’ price and via the additional elimination of the currency risk, Katev explained.

In general, the European investors will consider the Bulgarian economy as solid economy because of the fact that currency risk does not exist. This, according to Katev, will eventually make the Bulgarian-to-be privatized assets more attractive and thus – the entire Bulgarian economy.

Katev explained that the currency board binds the Bulgarian lev with the Deutsche mark and the euro, thus in practice after the launch of the new currency, the lev gets bound to the euro. The lev has been dependent on the euro for a while and in fact the financial operations have been made in accordance with the euro, the Deputy Finance Minister reiterated.

Starting from January 1, 2002, the euro is now legal tender in Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Former currencies, such as the drachma, peseta, franc and lire, will continue to be legal tender in the eurozone countries until the end of February, when the euro becomes the sole currency. Three European Union countries -- the UK, Sweden and Denmark -- have yet to sign on to the euro and are retaining their own currencies.

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