The EU’s poorest Member State, Bulgaria, is now a step closer to the euro after the 19 finance ministers of the Eurogroup agreed that Sofia should become the 20th country in the Eurozone by July 2019.
The Eurogroup signed off on a set of commitments on July 12 that set the requirements for Bulgaria to join the doc’s banking union.
The plan consists of a programme of supervisory reforms that will allow for strengthened cooperation with the European Central Bank. According to what has been agreed, Bulgaria will not be able to enter the exchange rate mechanism (ERM II) until its banks have passed a comprehensive stress test and asset quality review by the ECB.
“The European Commission welcomes Bulgaria’s efforts to join the Eurozone,” said the Vice-President of the European Commission responsible for the Euro, Valdis Dombrovskis, who said that Sofia could join the ERM II and the banking union by July 2019 if all of the requirements are met.
Concerns remain, however, as Bulgaria – which joined the EU along with Romania in 2007 – remains under the EU executive’s supervision due to numerous cases of corruption and rampant organised crime.
Eurozone ministers said that Bulgaria should “thoroughly implement the reforms monitored by the Commission under the Cooperation and Verification Mechanism in the areas of judicial reform and the fight against corruption as well as organised crime in light of their importance for the stability and integrity of the financial system”.
Dombrovskis reiterated significant progress by the Bulgarian government needed to be made in regard to the open questions about the commitments to reform and battling corruption before a final assessment on whether Bulgaria is ready to join ERM II can be made.