ESM: Bulgaria, Romania must Meet All Criteria to Enter Eurozone
Bulgaria and Romania can join the Eurozone once they have met all membership criteria, the managing director of the European Stability Mechanism (ESM), the Eurozone's rescue fund, said. "It is an ongoing process [...] Other countries should join but they need to meet the criteria," Klaus Regling said in response to a SeeNews question during a press briefing in Luxembourg last week.
"The convergence criteria are legally defined in the Maastricht Treaty and I know that Bulgaria has made a significant progress in meeting those criteria but hasn't met all of them," he added. Bulgaria and Romania committed to adopt the euro upon their accession to the European Union in 2007. The euro convergence criteria are measured through consumer price inflation, budget deficit, government debt, long-term interest rates and deviation from central exchange rate. Speaking over the weekend after a meeting with European Council President Donald Tusk, Bulgaria's prime minister Boyko Borissov said the country has met all the criteria to enter the Eurozone's waiting room, the Exchange Rate Mechanism II (ERMII).
"Bulgaria does not represent a risk to the Eurozone and deserves to be in its waiting room because it meets all the criteria for that," Borissov said in a statement issued by the government's press office. Borissov stressed the country's robust macroeconomic performance, budget surplus and low level of government debt-to-GDP ratio - the third lowest in the EU, as well as the significant drop in unemployment. Bulgaria's annual consumer price inflation stood at 1.4% in August.
The state budget showed a surplus equivalent to 2.2% of the GDP in the January-August period. Government debt totalled 6.0 billion levs, or 12% of GDP at the end of July. The Bulgarian currency, the lev, has been pegged to the euro at an exchange rate of 1.95583 levs per euro since 1999. Regling's comments echoed the position of the European Central Bank (ECB), which said in July 2016 that Bulgaria and Romania are among the seven countries that do not fulfil all conditions to enter the Eurozone.
"The seven countries under review (Bulgaria, Croatia, Romania, Czech Republic, Hungary, Poland, Sweden) comply with most of the quantitative economic criteria, but none of them fulfils all of the obligations laid down in the Treaty, including the legal convergence criteria," the ECB said in a convergence report at the time. On Tuesday, Romania's central bank kept its monetary policy rate at record low 1.75% - in line with analysts' expectations, as annual consumer price inflation slowed down to 1.2% in August, from 1.4% in July, according to official data.
Romania's consolidated budget deficit edged up to 0.63% of the projected 2017 gross domestic product (GDP) in the first seven months of 2017, up from 0.23% in the prior-year period. Romania's former prime minister Sorin Grindeanu said earlier this year that Romania will adopt the euro only after wages in the country come close to those in other European Union member states.
The two southeast European neighbours have the lowest monthly wages in the EU, according to the most recent official national statisics. Romania's net average wage totals 520 euro (0), while Bulgaria gross wage stands at 514 euro.
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