Citizens' Dialogue in Sofia with Vice-President Valdis Dombrovskis

The Vice-President explained that since Bulgaria’s currency is already pegged to the euro, it makes sense for Bulgaria to take the final beneficial step for full adoption of the euro, so that Bulgaria can play an active role in Eurozone decision-making process. 

In a reply to a question concerning the adoption timeframe, Valdis Dombrovskis explained that the ERM-2 adoption process may already be initiated this late summer. The decision of accepting Bulgaria in the ERM-2 and in the Banking Union is taken by the European Central Bank and the 19 Member States of the Eurozone plus Denmark.

The Vice-President confirmed that Bulgaria has the full support of the Commission to join the Eurozone. 

A participant was wondering why economically strong countries such as Sweden, Czechia and Poland had not joined the Eurozone. The Vice-President explained that Sweden and Denmark had held referenda concerning the euro-adoption but were faced with negative outcomes.

Denmark opted to peg its currency to the euro — just as Bulgaria has. 
Participants were concerned that the euro-adoption would bring higher inflation. The Vice-President reassured them: experience shows that the impact on inflation is minimal, however a general inflation that is unrelated to the introduction of the euro may occur. 

Asked whether joining the Eurozone would make for lower interest rates in Bulgaria, the Vice-President replied that the benefits are plenty and a lower interest rate is one of them. Other benefits are the positive impact on GDP, further economic transparency and robustness in potential future economic crises. 

The euro is not a ‘silver bullet’, though. It will not reduce income inequalities within the country automatically. For this, the government needs to decide on the necessary policy changes.