At a meeting on Thursday 12 July, the finance ministers of the Eurozone countries welcomed Bulgaria's hopes of joining the exchange rate mechanism (ERM II) and Banking Union. Sofia must now follow through on several commitments made on the financial, economic and political fronts.
This discussion follows a letter sent on 3 July by Vladislav Goranov, the Bulgarian finance minister, to several senior European figures, expressing Bulgaria's intention of joining ERM II and Banking Union, with a view to adopting the single currency (see EUROPE 12060). This letter was another step in a logical sequence, as Goranov had previously expressed similar intentions in January (see EUROPE 11937).
“The constructive discussions of the past few months on the roadmap towards Bulgaria's accession to ERM II paid off”, said Mario Centeno, the President of the Eurogroup, at a press conference. These conclusions are likely to be of satisfaction to Goranov, who had earlier told the MEPs of the 'economic and financial affairs' committee of the European Parliament that he expected the Eurozone ministers “firmly and unambiguously” to support the move.
Joining this antechamber of the Eurozone does, however, require Sofia to set in place several commitments negotiated with its partners. “We welcome the balanced and well-designed package of prior commitments taken by Bulgaria to ensure a successful ERM II entry and, ultimately, a successful euro adoption”, said Valdis Dombrovskis, the Commissioner responsible for the euro and Social Dialogue.
Over the next few days, the Bulgarian authorities must apply to the European Central Bank (ECB) to join the “close cooperation” procedure. Over the next month, the ECB will work closely with Sofia on banking supervision with a view to reinforcing its financial sector. Bulgaria has also undertaken to adopt several other measures concerning finance as well as its financial institutions and governance.
The Commission and the ECB will monitor the proper implementation of these commitments and give their green light to Bulgaria's accession to the ERM II mechanism. The ECB may present its assessment in “one year approximately”, said Benoît Cœuré, member of the board of the ECB.
Once they have joined Banking Union, the principal Bulgarian banks will be supervised directly by the ECB and will pay into the Single Resolution Fund. Although Dombrovskis confirmed at a press release that joining the Eurozone today meant joining Banking Union, the process under consideration here would be a first: Bulgaria would be the first member state to join Banking Union before it has adopted the single currency.
Once this stage is completed, the Bulgarian State would have to take new measures to achieve a “high degree of sustainable economic convergence” in order to accede to the Eurozone, as stated in the Eurogroup declaration adopted on Thursday. (Original version in French by Lucas Tripoteau)