SOFIA May 24 Bulgaria needs to show its economy
is more closely aligned to its wealthier EU peers before it
considers joining the euro zone, the European Central Bank's
chief economist Peter Praet said on Wednesday.
The Balkan country joined the European Union in 2007 and
while it has relatively low inflation and stable public
finances, its entry into the euro zone has been stymied by its
failure to tackle high-level graft and low income levels.
"When you look at the formal, numerical convergence
criteria, it looks quite good," Praet told a financial forum in
"Of course the debate ... is always about what we call now
sustained convergence, more structural. Because once you join
the monetary union, it's irreversible. There is no exit," he
"It is a very important decision ... and we have been
insisting very much about institutional capacity, institutional
building," he said.
Bulgaria, which pegs its lev currency to the euro, does not
have a target date to adopt the single currency. However, the
new centre-right government of Prime Minister Boiko Borisov has
put joining the Exchange Rate Mechanism (ERM-2), commonly known
as the euro's "waiting room", high on its agenda.
He has pledged reforms including setting up a body to tackle
graft although analysts are cautious on his reformist drive.
Bulgaria ranks as EU's most corrupt country according to the
index of Transparency International.
Finance Minister Vladislav Goranov, speaking at the same
forum on Wednesday, said Sofia would use diplomacy to convince
its EU partners it is ready to join.
"Our priority, of our government, is preparing the country
to join the euro zone as well as preparation to participate in
the banking union," Goranov said.
"Our efforts to integrate the country into European
financial infrastructure will continue in the way we think is
right - with diplomacy and convincing our partners that we are
ready to become part of these structures," he said.
(Reporting by Tsvetelia Tsolova; Editing by Susan Fenton)