Mistake lines in Bulgaria among the European-European forces are calling for the intensity of the Sangh, and those who are in favor of coordinating with Russia are playing daily in the nation. The European Union believes that any kind of delay in either can lead to euro entry in the fundamental doubt given to anti-euros movements inside Bulgaria. But the main reason why Bulgaria is due to adoption of the euro is that the country has made necessary reforms and now fulfills the criteria.
How will Euro adoption affect the Bulgarian economy?
Bulgaria should support the stability of the excessive euro-medication economy by joining a single currency, increasing the monetary policy flexibility and improves borrowing conditions. Adoption of euro will increase trend, which is the scope of rating (scope) Around 2.75% in a year is estimated, and the average can accelerate convergence for the standard of living of the European Union.
The opinion poll suggests that about half of the Bulgarians oppose the adoption of the euro. Will that be a problem?
Bulgarians are not the first people of the country who are preparing to adopt the euro, who have proved doubt about the benefits before the either. But the support for the euro arises after adopting a single currency because the worst fears of many become baseless.
There is a case in inflation point. Instead of increasing inflation as fear of some Bulgarians, entering the euro should reduce inflation over time as the euro block trims integration within the transaction cost. The cost of borrowing as a member state of the Euro region should be low as they live outside Bulgaria.
Should the European Union be worried that Bulgarian governments can reduce budgetary discipline and endanger the stability of the Mudra Association after Euro entry?
Bulgaria has a record of fiscal discipline, which records a minor budget deficit and low public debt. Recent years of more high budget deficit of GDP’s recent years – Mastrichic treaty limits – and increased public debt, including partially general elections and allied populist policy reactions, result of political instability.
I believe that we are unlikely to look at any overt slipage of budgetary discipline after Euro entry. Croatia is a good example of a nation with fiscal discipline after joining the Euro. Euro-region member states need to meet specific fiscal rules. They have to submit an annual draft budget for the European Commission evaluation under the European semester, a procedure that does not require the member states of the non-euros European Union.
The fiscal structure of the European Union, which includes stability and development treaty and excessive deficit process, remains strong. Since the political instability associated with the split surrounding the euro adoption is partially responsible for the recent budgetary slippery, disposing of the euro question for a generation may reduce some political mistake lines and reduce some government spending risks.
See also from the scope on Bulgaria’s Euro Eclipse.
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Dennis Shane Macro is the chairman of the Economic Council and leads the global economist of the Scope Group. The rating agency’s macroeconomic council brings together the company’s credit opinion from several issuing sections: sovereign and public sector, financial institutions, corporates, structured finances and project finance. Brian MarleyA senior analyst of sovereign ratings in the scope and lead sovereign analyst for Bulgaria contributed to the writing of Q&A.
