November 20 (SeeNews) - The Bulgarian government needs to step up structural reforms in order to prepare the country for joining the Exchange Rate Mechanism (ERM II) and the EU’s banking union, the European Bank for Reconstruction and Development (EBRD) said.
"While Bulgaria consistently meets the macroeconomic requirements to become part of ERM II, the authorities should remain committed to key structural reforms needed to achieve this goal," EBRD said in its Transition Report 2019-2020 published on Tuesday.
Local media quoted finance minister Vladislav Goranov as saying at the and of October that Bulgaria will possibly conclude all processes needed for its accession to the ERM II, the preparatory phase for the adoption of the euro, and the Banking Union of the EU by the end of April 2020. After the European Insurance and Occupational Pensions Authority (EIOPA) expressed its support of Bulgaria's prospective entry in ERM II and the Banking Union, the country is now awaiting approval from the European Central Bank (ECB).
Bulgaria should also continue working on the implementation of the commitments within the framework of the EU’s Cooperation and Verification Mechanism (CVM), EBRD noted in its report.
Last month, the European Commission said that it mulls concluding the monitoring of Bulgaria under the CVM due to the country's 'sufficient progress' in meeting its commitments regarding the mechanism. However, Bulgaria will need to continue working consistently on translating the commitments reflected in the Commission's report into concrete legislation and on continued implementation.
The EBRD said in its report that attention should be turned to reforming the business environment, retaining qualified workers and improving the skills of the existing labour force.
According to the World Bank's Doing Business 2020 report published in October, Bulgaria ranked 61st out of 190 countries in ease of doing business, dropping two places compared with the previous year. This is among the lowest rankings in the EU.
The EBRD said that Bulgaria's economy is expected to grow by 3.7% in 2019 and 3.0% 2020, the latter being broadly in line with the country’s current growth potential.
"Growth is likely to be underpinned by private consumption, which traditionally fuels economic activity," the EBRD said.