July 13 (SeeNews) - The finance ministers of the euro area member states and the European Central Bank (ECB) said that Bulgaria could simultaneously join the Exchange Rate Mechanism (ERM II) and the banking union after a positive assessment of ECB, which will take up to one year to be completed.
"Once they have provided a positive assessment, a decision will be taken by the ERM II parties on the formal application of the Bulgarian authorities for ERM II participation. The decision will be linked to the ECB decision on close cooperation, in full respect of the conditions specified in the legal framework. This would imply that Bulgaria simultaneously joins ERM II and Banking Union," a statement posted on the Council of the EU website reads.
The ECB is expected to conclude its comprehensive assessment within approximately one year after Bulgaria's formal application for close cooperation.
"We call on the Bulgarian authorities to 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 and organised crime in Bulgaria, in light of their importance for the stability and integrity of the financial system," the ministers said in the statement.
On July 3, Bulgarian finance minister Valdislav Goranov and central bank governor Dimitar Radev said in a letter of commitment that Bulgaria expects to simultaneously join ERM II and the banking union by July 2019.
In the letter, the country committed to improve banking supervision by entering into close cooperation with the European Central Bank, to strengthen insolvency and anti-money laundering frameworks, enhancing supervision of the non-banking financial sector.
On June 1, Goranov confirmed Bulgaria's intention to apply, by the end of the month, to enter the ERM II, the system set up by the EU to prepare non-euro member states for joining the eurozone.
In May, the ECB and the European Commission said the country is not prepared to join the eurozone as it does not meet all criteria. The ECB said that Bulgaria should deal with macroeconomic imbalances, and needs to adopt laws to preserve central bank independence, in order to meet criteria for joining the eurozone.
The European Commission said in its convergence report published together with the ECB's report that Bulgaria does not fulfil the conditions for the adoption of the euro as its legislation, and its law on the central bank in particular, is not fully compatible with the requirements of the treaty on the functioning of the EU.