SOFIA, March 1 Bulgarian Prime Minister Sergei
Stanishev on Sunday pressed for a quick entry of the Balkan
country in the pre-euro Exchange Rate Mechanism (ERM-2) as a
step to cushion the impact of the global crisis.
Stanishev sought support for Bulgaria's ERM-2 entry -- a
two-year currency stability test for euro hopefuls -- saying
such a move will send a positive signal to investors at a
European Union summit in Brussels.
"Our participation in the ERM-2 will be a strong impulse
for the reforms as well as a strong signal to investors and
will confirm our financial and macroeconomic stability," the
government press office quoted Stanishev as saying.
German Chancellor Angela Merkel indicated on Sunday that
the process to joining the ERM-2 could be accelerated. "There
are requests to enter ERM 2 faster. We can have a look at
The country is heavily dependent on foreign cash to finance
its huge current account deficit and analysts say it may face a
hard landing as investors flee the emerging economies and its
key export market, the EU, has plunged into recession.
High inflation and bloated current account gap have
frustrated Bulgaria's efforts to join the two-year obligatory
mechanism for euro zone entry since 2007 when it joined the
Diplomats in Sofia say the Socialist-led government's
failure to crack down on widespread corruption and stop fraud
with EU funds put serious obstacles to its ERM-2 entry.
The latest Reuters poll [EMU/MEMS1] on the issue, in
January, showed Bulgaria adopting the euro in 2015 from 2014
Bulgaria operates in a currency board regime and has pegged
its lev currency to the euro since 1997.
The government has repeatedly said it plans to keep the
current peg until it enters the euro zone, despite the
turbulence caused by the global crisis.
Bulgaria's reliance on foreign cash makes it vulnerable and
analysts say it may be the next in line to seek International
Monetary Fund support after Hungary, Iceland, Latvia, Serbia
(Reporting by Tsvetelia Ilieva, Editing by Maureen Bavdek)