Prof. Hanke: If Bulgaria Enters the Eurozone, It Will Follow in Greece’s Footsteps
‘’Bulgaria should not enter the Eurozone,’’ said Professor Steve Hanke regarding the current situation on the Balkans in an interview for the Bulgarian National Radio (BNR). ‘’What Bulgaria needs is a currency board and discipline. If you enter the Eurozone, you will lose all discipline and I am afraid that you will start walking in the direction of Greece, because you too have big financial problems.’’
He further stated that he believes that new Chair of the Bulgarian National Bank (BNB) should be against Bulgaria entering the Eurozone and yet again urged it to publish it’s the financial reports of each bank in the country every month.
‘’I personally would support someone who would oppose Bulgaria entering the Eurozone or would at least be skeptical about this,’’ Hanke added.
The effect of the Greek crisis upon Bulgaria will be capsulated but negative scenarios still should not be completely excluded, Hanke warned. He added that Greece should be obliged to impose the reforms that the creditors require.
‘’There is one single way in which the Greeks could survive outside the Eurozone,’’ Hanke said. ‘’They should apply what I call the ‘’Bulgarian solution’’ – a currency board. With the reintroduction of the drahma, its currency rate should be fixated alongside the Euro. This will make them more disciplined. In fact, this is the best way for the Greeks to put their finances in order and to make the necessary reforms. They should follow in Bulgaria’s example and introduce a currency board.’’
*Steve Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore, USA.
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