EU supports Bulgaria’s first step to join euro

Vastavam web: Euro zone finance ministers gave their green light on Thursday to Bulgaria’s bid to join the bloc’s banking union, a step towards the Balkan state’s adoption of the euro, they said in a statement. Bulgaria meets the nominal criteria to adopt the common currency, with low inflation, healthy public finances and its lev currency already pegged to the euro.Euro zone finance ministers agreed on the timeframe for Bulgaria’s next steps towards the euro membership. Under the plan, Sofia would first join the bloc’s banking union in a process that should last about one year.

Banking union member countries transfer to EU bodies the powers to oversee their top banks and deal with ailing lenders. Once this process is completed under the supervision of the European Central Bank, Bulgaria will be able to apply to join the bloc’s ERM-2 exchange rate mechanism – a waiting room of at least two years, that precedes euro membership. “We welcome the intention of the Bulgarian authorities to put in place the necessary elements for a successful entry into ERM II,” the statement issued at the end of the finance ministers’ meeting said.

Sofia is expected to send a request to join the banking union in the coming days, ECB board member Benoit Coeure told a news conference after the meeting. The joint statement says the assessment of Bulgaria’s banking union progress should be made “within approximately one year” from its application. Bulgaria had hoped to join the ERM-2 much earlier than this process seems to foresee, but under pressure from its European Union peers accepted a series of wide-ranging commitments that may prolong its waiting period.