European Union

07/12/2018 | Press release | Distributed by Public on 07/12/2018 17:17

Vice-President Valdis Dombrovskis' remarks at the press conference on Bulgaria's path towards ERM II and Banking Union participation

Good evening everyone,

The Commission welcomes the efforts of Bulgaria to join the euro area.

In economic terms, there are clear benefits of being part of the euro area: it is a positive signal for investors, it lowers barriers for businesses, it can reduce interest rates and currency conversion costs, it brings a positive impact on growth as a result of full integration into the single market, and stronger growth eventually leads to higher living standards in the country.

Politically too, euro membership puts countries at the core of the European Union.

Today we endorsed Bulgaria's strategy to join the Exchange Rate Mechanism II and the Banking Union simultaneously.

It is true that now integrating into the euro area also means joining the Banking Union.

We therefore welcome the balanced and well-designed package of prior commitments taken by Bulgaria to ensure a successful ERM II entry and, ultimately, a successful euro adoption.

It includes supervisory measures aimed at reinforcing the financial sector, for both banking and non-banking activities.

It also includes measures aimed at strengthening Bulgaria's institutions, governance capacity and economic structures, notably in the areas of insolvency, anti-money laundering and the governance of state-owned enterprises.

It is clear that Bulgaria wants to move forward.

To become a member of the euro area.

But also to prepare well in order to ensure a successful membership of the euro area through improved resilience and stronger financial, economic and social structures.

On the next steps, the Commission and the ECB will monitor the effective implementation of Bulgaria's commitments within our areas of competence.

We will also continue to monitor judicial reform and the fight against corruption and organised crime in Bulgaria under the Cooperation and Verification Mechanism.

President Juncker has made it very clear: the EU wants to support countries in their efforts to join the euro area. One issue is political support. But we also offer a new 'convergence facility' or, in other words, technical - and in some cases financial -assistance to make the adjustments needed.

We will need to work hard and work together. But I believe that the desired timeline - joining both ERM II and the Banking Union within one year - is realistic.

To conclude, the road to the euro may seem long and difficult. It can get rocky. But it is a meaningful journey to make. It mobilises minds and energy to change the country for the better.

I believe that Bulgarians will be the first to benefit from this journey, as it will eventually improve their living standards and open up many new opportunities.

Thank you.