Tuesday, 4 August 2009

Bulgaria Slowly Losing Its Soul To The EU

Bulgaria Slowly Losing Its Soul To The EU

What a shame, so many other EU countries have lost their National currencies and the feeling is quite sterile. Bulgaria losing the Bulgarian Lev, which was first introduced during the process of Bulgaria's independence in 1881. The lev currency, which was a kind of celebration of independence from the Ottoman rule, will lose his place to the Euro. Somehow part of the soul of Bulgaria will go with this coming into place, but we all knew it would happen. The EU now acts as dictator in place of the Ottoman 128 years on, who now demand their own currency to be put in place.

Bulgaria may adopt the euro in the last year of the new government's mandate which expires in 2013, Finance Minister Simeon Djankov said in an interview to 24 Chasa daily, published on Monday.

Djankov, who is also deputy prime minister in the new cabinet of the centre-right GERB, has said Bulgaria plans to apply for entry to ERM-2 -- the two-year currency stability test for euro hopefuls -- as early as November.

The emerging economy will meet all official criteria for euro zone entry by the end of the year, but the key effort for now was to avoid slipping into a budget deficit of over 3 percent of GDP, he said.

'We are currently at 2.2-2.5 percent (budget deficit) ... If the deficit exceeds 3.0 percent, it will put off our euro zone entry by two more years,' he said.

'We have a chance in the last year of the mandate to introduce the euro,' Djankov said.

Double-digit inflation and a current account deficit of over 20 percent of GDP in the past several years, as well as the country's image as the most corrupt EU state, have prevented Bulgaria's efforts to join the ERM-2 mechanism so far.

The global economic downturn has hit domestic demand and imports as well as the external deficit and consumer price inflation have started to ease.

Djankov said inflation will drop to under 3.0 percent on an annual basis at the end of the year from 3.7 percent registered in June. Bulgaria's current account gap is expected to shrink to about 12 percent this year, analysts say.

The Balkan country operates under a currency board regime that pegs the lev to the euro at 1.95583. Djankov has said that Bulgaria will keep its peg until it enters the euro zone.

Source: www.lse.co.uk
Image by Will Spaetzel
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