December 8 (SeeNews) - Bulgaria's entry in the exchange-rate mechanism (ERM II), the euro's two-year waiting room, is hindered by unclear political criteria and this could delay the adoption of the single European currency, the country's central bank governor Ivan Iskrov said.
Bulgaria plans to apply early next year to join the ERM II and adopt the euro in 2013, Finance Minister Simeon Dyankov told Bloobmerg in November.
The country, which joined the European Union in 2007, currently meets most of the Maastricht criteria for adopting the euro but there are no formal criteria for a country to join the ERM II, Iskrov told an international conference on the economic and political challenges on the path to membership in the Eurozone held in Sofia on Monday.
Candidates must meet the Maastricht criteria on inflation, public debt, budget deficit, currency stability and interest rates to qualify for adoption of the euro. The Maastricht criteria require that the annual inflation in a candidate country should not exceed the average for the three countries in the EU with the slowest price growth plus 1.5 percentage points, budget deficit should be contained to within 3.0% of the gross domestic product and public debt should not exceed 60% of GDP.
"But practically it is already clear that the introduction of a single European currency in a certain country is also a complicated political project," Iskrov said.
"Not the set, particular and publicly monitored economic criteria but the political factor is leading in the entry in the exchange rate mechanism. [...] Unfortunately, political considerations in favour of and against the Eurozone expansion are not always predictable," he added.
Since July 1997 Bulgaria has been operating an IMF-prescribed currency board system, a tight monetary arrangement that ties the level of cash in circulation to the amount of central bank foreign exchange reserves. The fixed exchange rate of the Bulgarian lev under the system is 1.95583 per euro.
"I would like to remind that our entry in the Eurozone will be an implementation of one of the country's main duties ubder the EU Accession Treaty. [...] It is our obligation, not a privilege," Iskrov said.