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Bulgaria's govt will not 'force' ERM II entry amidst lack of consensus - PM

Bulgaria's govt will not 'force' ERM II entry amidst lack of consensus - PM Author: Government Information Service Licence: All rights reserved

SOFIA (Bulgaria), February 18 (SeeNews) - The government will not 'force' Bulgaria's entry into the Exchange Rate Mechanism (ERM II), the mandatory phase preceding membership of the euro area, until an absolute public consensus is reached, prime minister Boyko Borissov said. 

"This does not mean that we are giving up on the adoption of the euro but after the president and the opposition, as well as so many people spoke, I am obliged to slow down the pace and only after all of us become convinced that this is a good thing will we move forward," Borissov said in a video file posted on his Facebook page, addressing concerns about the euro adoption among Bulgarian public.

There is no country which has not benefited from the adoption of the euro, but at the same time Bulgarians are concerned - for one reason or another, about a possible rise in prices in case of joining the euro area, the prime minister said. 

In October of last year, finance minister Vladislav Goranov said Bulgaria will possibly conclude all processes needed for its accession to the ERM II and the Banking Union of the EU by the end of April 2020.

Borissov did not specify in his statement whether the government plans to delay the planned ERM II entry until after April.

Earlier this month the government approved changes to the central bank law that sets the fixed exchange rate of the local lev currency against the euro under the currency board system operated since 1997 that has brought financial stability to the Balkan country after a severe banking crisis.

The changes do not call into question the current fixed exchange rate regime but rather seek to ensure compliance of domestic regulatory framework with the European regulatory framework governing the administrative process and operational procedures for the approval of exchange rates in the ERM II, the finance ministry said back then.

At the end of last month, the finance ministry said in response to local media speculation that it will maintain its currency board system pegging the lev to the euro until the country adopts the common currency.

The lev is pegged at 1.95583 per euro under the currency board system.