Alfred Kamer: Bulgaria's entry into the Eurozone will bring important benefits to the country
Bulgaria already has rich experience - more than two decades with a currency board, which means that the monetary policy is already tied to the decisions of the ECB, noted the director of the European Department at the IMF
Photo: Nikolay Iliev, Dir.bg
The most important thing about Bulgaria's accession as a full member is that it will bring important benefits to Bulgaria and place it at the table where the ECB makes important decisions, but it requires additional work from politicians as well as overcoming many challenges that will be faced the country be straightened. Alfred Kamer, director of the European Department at the IMF, said this at the beginning of his speech. He participated in the second panel "Adoption of the euro - relevant experience and way forward" at the financial conference "Bulgaria in the Eurozone - advantages and opportunities", together with the representatives of the national banks of Slovenia, the Netherlands and Croatia. Mr. Kamer currently oversees the IMF's work with the EU, has extensive experience with European and African countries, and is familiar with the introduction of the currency board in Bulgaria in 1997.
He specifically noted that the currency board was the right step for economic stability because Bulgaria maintains one of the lowest levels of debt among European countries and has made serious progress on structural reforms, although there is still much additional work to be done.
The benefits for Bulgaria outlined by Mr. Kamer: First of all, joining the Eurozone will reduce the costs of financial operations, trade and increase economic efficiency.
Secondly, it will increase the country's credit rating.
Thirdly, it will not guarantee the risks with the sovereign debt, but it will significantly protect the state in comparison with other countries outside the Eurozone, and Bulgarian banks will have access to cheaper credit financing.
Fourthly - the introduction of the euro will give Bulgaria the opportunity to participate in the decision-making process, so far and currently Bulgaria implements the decisions of the European Central Bank without having the right to vote.
The expert from the IMF also gave specific examples of the Baltic states and their accession to the Eurozone over the years (Estonia-2011, Latvia - 2014 and Lithuania - 2015 - author's note)
The example of Lithuania and Latvia is that the cost of public debt was falling in these two countries, inflation remained low and rose at a slow pace, even after the war in Ukraine started, Mr. Kamer pointed out. And all this enabled a more flexible market, contributing to the preservation of the competitive advantages of both countries. And in the end, the burning benefit for the three Baltic states from the introduction of the euro is that the risk of an outflow of capital was significantly mitigated.
What does all this mean for Bulgaria - to maintain strong financial discipline and to continue the reforms that have been started. According to Mr. Kamer, it is very important to continue with financial discipline, it is of key importance. It should be noted that labor costs in Bulgaria are rising faster than in the Eurozone, but productivity is growing at a significantly slower pace, the IMF representative concluded, and recommended investing in human capital and healthcare.