SOFIA (Reuters) – Bulgaria aims to join the EU’s banking union on the same day it enters the “waiting room” for euro zone membership, where it must spend at least two years before joining the single currency, its prime minister said on Friday.
Boyko Borissov said Sofia was ready to allow scrutiny of its banks by the European Central Bank, but needed a commitment from euro zone states to a firm date for entry into the bloc’s exchange rate mechanism, ERM-2.
“The banking union and the euro zone’s waiting room should happen on one and the same day,” Borissov told reporters on the sidelines of an European Union summit in Brussels.
As one of EU’s poorest states, Bulgaria has been trying to build momentum for its entry to ERM-2 while holding the rotating EU presidency. Its tenure ends on Saturday.
It had initially argued that entry to ERM-2 and the banking union should be separate processes, while the European Commission and the European Central Bank have said they should be linked.
But some euro zone countries, concerned about low income levels in Bulgaria and the impact a legacy of corruption may have on the stability of its banks, do not want Sofia to join the single currency any time soon.
Borissov suggested on Thursday it would push to apply to join the ERM-2 at a meeting of EU’s finance ministers next month.
But he declined to confirm that on Friday, saying bankers at the ECB and the European Commission were “very sensitive” to such matters.
Bulgaria meets the nominal criteria for adoption of the euro, with its lev currency pegged to the euro, low inflation and healthy public finances.
But economic output per capita, just half the EU average, and widespread graft, as well as the collapse of its fourth largest bank in 2014, have cast a shadow over its ambitions.
It is also yet not clear how Bulgaria would combine the applications to enter the banking union and ERM-2.
The request for the first must be filed at least five months before an expected entry date, while a reply to a request to join the ERM-2 takes three days.
Finance Minister Vladislav Goranov said this month he expected Bulgaria would be able to enter both within a year.
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