Bulgaria’s new centrist government is determined to bring the Balkan country into the eurozone in 2024, Finance Minister Assen Vassilev told Reuters in an interview on Friday.
Vassilev, a Harvard alumnus who took up the post in December, said neither surging inflation, nor the fiscal deficit target this year should push the country off its path to adopt the euro at the current peg of 1.95583 levs per euro.
“We have reconfirmed the target of Jan. 1, 2024 for Bulgaria to adopt the euro. Technically, we are doing all the work, it’s going pretty well, so we think there will be no issues there,” Vassilev said, adding that he was “pretty confident” about the date of entry.
With gross domestic product per capita at just over half of the EU average, Bulgaria seeks to adopt the euro to speed the rate at which it is catching up with richer Western peers.
“There are two big benefits: cost of doing business will go down and the other one is investor confidence. When you are part of the euro, investors feel much more comfortable,” he said.
Bulgaria is one of the EU’s least indebted member states and meets the nominal criteria for eurozone membership except the requirement on inflation, which jumped to 6.8% year-on-year in December, boosted by a surge in energy prices.
Vassilev said inflation would come in slightly above the EU average in 2022 due to energy costs, but believed it would come close to the EU average next year.
To deliver on its eurozone goal, Bulgaria needs to prove to its richer western peers it is serious about combating wide-spread corruption and convince Bulgarians that the switch to the euro would not lead to higher prices.
Half of Bulgarians are yet to see the adoption of the euro as a positive move, and about 77% fear it would lead to abusive price setting during the changeover, according to a Eurobarometer survey published in July.
Vassilev he was confident that planned reforms will deliver results in the fight against corruption, while a targeted information campaign starting this summer should boost public support for the single currency.
“We want to make it easy for every business, for every person to see what it actually means to go to the euro and then make up their mind whether that’s good or bad for them.” [Reuters]