Bulgaria’s caretaker government needs to speed up talks with European Union institutions to ensure that the country does not miss its target date of January 2024 for joining the euro zone, the parliament agreed in a resolution passed late on Thursday.
Bulgaria, plagued by political turmoil that has prompted four elections in the past two years, has lost momentum in its preparations for adopting the euro, said central bank officials and economists.
With parties again locked in difficult talks on forming a working government following an inconclusive snap election on October 2, lawmakers urged the caretaker administration to step up the preparations for the euro adoption.
Today I had the opportunity to address the Bulgarian Parliament and to express my view that Bulgaria should continue working on entering the Euro area and to be an even more active participant in EU processes and vital discussions on the future of our Union. ???? pic.twitter.com/samEW7Vwoz
— Atanas Pekanov (@atanaspekanov) October 27, 2022
The two largest political parties, the centre-right GERB and reformist PP, backed the resolution, stressing the benefits for Bulgaria of integrating its economy more deeply in the 27-member EU. Its currency, the lev, has already long been pegged to the euro.
The pro-Russian nationalist Revival faction voted against, while the Socialists and the Bulgarian Rise party abstained.
In total, 157 lawmakers in the 240-member parliament voted for the resolution to speed up the euro preparations, while 28 voted against and 23 abstained.
Central Bank Governor Dimitar Radev told lawmakers on Thursday that political instability posed a serious challenge to Bulgaria’s eurozone entry and that urgent political decisions were needed to ensure it did not miss its target date in 2024.
He told the chamber that a delay of the euro zone entry could trigger credit ratings downgrades that would increase Bulgaria’s financing costs, already on the rise amid the political impasse.
Bulgaria aims to join the euro zone at its current fixed rate.