Bulgaria’s eurozone integration: country moves towards joining stability mechanism

Members of the Parliamet's ad-hoc budget committee on May 14 voted by an overwhelming majority to approve the next step in Bulgaria’s integration into the eurozone.

The committee backed ratification of the agreement for Bulgaria’s accession to the European Stability Mechanism, which was created to support member states during financial crises and help prevent instability across the euro area.

Bulgaria is initially expected to contribute more than €600 million to the mechanism, divided into four instalments. The country has secured a reduced, temporary contribution arrangement due to its GDP remaining below the eurozone average. Bulgaria could also benefit financially from the mechanism in the future.

Metodi Metodiev, deputy finance minister: “The accumulated profit is around €5 billion, so the board decides how to use that profit — whether to distribute it back to shareholders or allocate it to a reserve fund.”

Most members of the ad-hoc committee supported the measure.

Committee chair Konstantin Prodanov stated:

“This mechanism gives us a guarantee — although every guarantee comes at a price, like any insurance policy — that in stormy seas we will not be left overboard.”

Vladislav Goranov, MP from GERB-FSD: “The euro is arriving at exactly the right time, and this is part of the financial mechanisms that improve the condition of the state rather than weaken it.”

Martin Dimitrov, Democratic Bulgaria MP: “Whoever governs Bulgaria, we must have different opportunities for the country to receive external assistance.”

The only MP to vote against the proposal was Tsoncho Ganev of Vazrazhdane party.

Tsoncho Ganev, MP from Vazrazhdane.

“What is more worrying is what happens in a situation where one of the eurozone member states starts heading towards bankruptcy.”

The agreement is now due to be put to a vote in the plenary chamber of Parliament.