SOFIA, June 26 (Reuters) - Bulgaria is in no hurry to join the euro zone after watching the failure of its Balkan neighbour Greece to observe the necessary fiscal discipline, Prime Minister Boiko Borisov said on Friday.
Bulgaria is the poorest member of the 28-nation European Union but has one of the lowest levels of public debt, at about 28 percent of gross domestic product. Greece has the EU’s highest public debt, at around 175 percent of GDP.
“While the euro zone countries do not discipline themselves, I see no reason to rush with the membership,” Borisov said in a statement.
“If we were in the euro zone, we would also have to give money to Greece - the poorer would give to the richer, I do not see a logic in that,” said Borisov, referring to multi-billion euro bailouts provided to Athens by its currency bloc partners.
Euro zone finance ministers were set to hold an emergency meeting with Greece on Saturday in a last-ditch attempt to agree a cash-for-reforms deal to avert a debt default and a possible Greek exit from the common currency.
“The Greek government must find a rational outcome,” said Borisov, whose centre-right government returned to power last year after a snap election. “For Bulgaria, this is an example of what it means not to observe fiscal discipline.”
Bulgaria has to maintain a tight fiscal policy because it operates a currency board that pegs its lev currency to the euro. Running up large debts would put pressure on the peg.
Apart from Britain and Denmark, which have a legal opt-out, all other EU member states are required eventually to join the euro.
Earlier this year, Bulgarian Finance Minister Vladislav Goranov said the Black Sea state would begin talks on adopting the euro and could join the preliminary exchange rate mechanism for euro zone entry by the end of 2018.
Analysts and bankers have urged the government to prepare for euro zone entry, saying this would help rebuild confidence in its banking sector, damaged by the 2014 collapse of the country’s fourth-largest lender, Corporate Commercial Bank (Corpbank).
Corpbank was declared bankrupt after a run on deposits triggered the biggest banking crisis in Bulgaria since the 1990s.
The cost of bailing out Corpbank’s depositors helped to push Bulgaria’s budget deficit to 3.7 percent of GDP last year, above the EU’s 3 percent ceiling. (Reporting by Angel Krasimirov; Editing by Gareth Jones)