Crisis or Not, Bulgaria Is Going Euro - EC Makes It Final
The European Commission made clear that Bulgaria’s planned entry into the Eurozone remains unchanged, regardless of the political uncertainty in Sofia.
Bulgaria New Cabinet Member Stirs Controversy
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Ilian Mihov is Bulgaria's new deputy prime minister in charge of coordinating EU funding and the country’s efforts to join the еurozone. Photo by capital.bg
The young macroeconomics professor, who was recruited by Bulgaria's prime minister to strengthen the government’s financial and economic team, faces an uphill struggle to impose his views.
“Ilian Mihov is a perfectly educated man, but he will have to acquaint himself with the problems of the country very quickly,” Ivan Kostov, leader of the die-hard right-wingers and former prime minister, commented on Friday, a day after the appointment of the new deputy prime minister in charge of coordinating EU funding and the country’s efforts to join the еurozone.
“His idea of a loose currency board arrangement is also very worrying. There is no need for this now,” Kostov added.
According to him Mihov has to make it clear that he will not initiate any changes in the currency board and will boost the efforts of Finance Minister Simeon Djankov for speedy accession to the eurozone.
Meanwhile in an interview for the local daily 24 Hours Mihov denied he aims to loosen the currency board arrangement, blaming journalists for not getting the point from his statements for a more conservative system.
“I do not plan to topple the currency board, quite the opposition – I want to make it stronger,” Mihov told the daily.
The Bulgarian currency the lev is linked to the euro in a currency board that keeps the Bulgarian currency at 1.9558 to the euro.
Bulgaria's government has announced that the country will apply by the end of January this year to join the exchange-rate mechanism, the two-year currency stability test prior to euro adoption, and seek to switch to the common currency by 2013.
Joining the exchange-rate mechanism may allow the lev to fluctuate by as much as 15 % around a central band, though the central bank has said it will leave the lev tightly pegged to the euro through the duration of the two years.
The exchange-rate mechanism would bring Bulgaria closer to the umbrella of the euro region and the protection of the European Central Bank and is conditional on whether the new government will succeed to restore Brussels trust.
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