Political will is needed to allow Bulgaria to join the euro zone in 2024 – central bank governor By Stocksak

© Stocksak. FILE PHOTO – The EU and Bulgarian flags fly at the Bulgarian side, March 2, 2020. REUTERS/Florion Goga/File Photograph

SOFIA (Stocksak), – Bulgaria’s chances to join the euro area as of January 1, 2024 is in serious jeopardy, according to its central bank governor.

Dimitar Radev spoke in parliament and stated that the Balkan nation needs to have a clear political commitment to rectify the delays resulting from the political turmoil of the past two year if it wants to adopt the single currency.

General polls held on October 2, the fourth in 18 month, produced a deadlocked parliament. This impasse is making it difficult to form a functioning government. It was impossible to rule out new snap polls.

The European Union’s most poor member, which already has its lev currency linked to the euro, had pledged to adopt one currency at its current fixed-rate rate, but it lost momentum after joining “waiting room”, along with Croatia, in 2020.

Croatia is set to adopt euro next year.

Radev stated to deputies that there was a significant delay in the process, mainly in the taking of political decisions. “The only difference between Croatia and Croatia is that Croatia has shown very strong political engagement.”

Radev stated that the absence of a regular government capable of making a clear commitment to Bulgaria’s eurozone prospects is a problem.

Radev answered lawmakers’ questions about whether the country could join the euro area in 2024.

He stated, “If we don’t have a budget or a clear midterm fiscal forecast, the condition for meeting the nominal criteria will be difficult.”

This week, the caretaker government declared that it would not present a draft budget for 2023.

Bulgaria must meet the criteria for price and exchange rate stability, sound finances, and moderate long-term rates of interest to adopt the euro. All these criteria are measured against EU benchmarks.

Radev stated that while Bulgaria is not meeting the inflation criteria at the moment, there are clear indications that this could change.

He warned that any delay in the entry to the euro area would result in a decline of the country’s investment-grade credit ratings. This will increase the country’s financing costs, which are already rising amid the political impasse.

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