Bulgaria hopes to join the single European currency, the euro, in 2009

Bgnews.com, 27th February 2006

Bulgaria hopes to join the single European currency, the euro, in 2009, Prime Minister Sergey Stanishev said Monday.
He made his remarks at a meeting with the visiting head of the European Central Bank Jean-Claude Trichet, the government press offices said.
"The government is working for Bulgaria's accellerated accession to the (EU) Economic and Monetary Union and the successful introduction of the euro in 2009," the service quoted Stanishev as saying at a meeting with Thrichet, who started a two-day visit to this country.
Stanishev said the Socialist-led three-way government was planning to maintain Bulgaria's macroeconomic stability and ensure its admission into the EU in 2007.

The main challenges before Bulgaria's bid to join the euro are inflation, soaring foreign debt and current account deficit, Trichet told a public discussion attended by diplomats, politicians and economists.

He praised the country's central bank's efforts to contain a surge in loans that has triggered concern among international lenders and particularly the International Monetary Fund.

"Bulgaria has made noticeable progress in terms of conducting a stable macroeconomic policy... But the recent dynamic of Bulgaria's external accounts indisputably calls for enhanced vigilance," Trichet said. "This dynamic has been largely fed by robust credit growth to the private sector."
"Inflation is certainly another challenge on the road to future European monetary Union membership after entry in the European Union. Indeed, at 6.5 percent at the end of last year, headline inflation is high," he added.
The central bank said last week Bulgaria's current account deficit widened to 14.9% of gross domestic product last year from 8.5% a year earlier.
The bank cited also preliminay data showing that credit expanded by 32.4% by the end of the last year.
Inflation has moved from 10.3% in 2000 to 2.3% in 2003 and 6.5% at the end of 2005.

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