AS Bulgaria prepares to enter the last phase of negotiations for accession to the European Union, the question of switching to the common EU currency - the euro - has sparked debate among financial experts in the country.
The debate was started by the deputy governor of Bulgarian National Bank (BNB), Martin Zaimov, who also heads the BNB department managing the currency board. Speaking at the end of last year, Zaimov that Bulgaria could introduce the euro as early as 2007 and could join the EU even earlier.
The Bulgarian economy had the potential to cope with rising oil prices, according to Zaimov.
He said Bulgaria had experience in coping with high oil prices, following market developments two years ago.
"Although the impact is not positive, it is by no means serious or destabilising," Zaimov said.
"High oil prices have an adverse impact on the Bulgarian economy as it relies heavily on imported energy resources, and also because such price hikes push up inflation. However, the country's economy is in a rather good condition, so this should be regarded not as a significant pressure, but rather as one of many external developments which may be positive or negative," he said.
According to him, the exchange rates of the lev and the euro to the US dollar were not crucial to the Bulgarian economy.
"They are of significance to individual companies: some may gain and others may lose, depending on their positions in terms of dollar-based assets," Zaimov said, and added that the overall effect on the economy was neutral and of minor significance.
The introduction of the euro in Bulgaria would be technically impossible before 2009, Rumen Avramov, an economist at the Centre for Liberal Strategies, told Radio Free Europe last Sunday.
Avramov said the criteria which Bulgaria should meet to introduce the euro were identical to those for the other EU applicants. The two-year transition period should be used to adapt to the common economic policy and to meet the Maastricht macro-economic criteria in the euro-zone.
The two-year period does involve membership in the European common currency mechanism but countries with currency board arrangements such as Bulgaria will have the right to keep the currency board and need not change the exchange rates of their national currency.
The only difference is that their central banks will have to do unilaterally what they are doing currently, that is, to maintain the stability of the national currency or the fixed exchange rate, Avramov said.
In his opinion, the Bulgarian currency board has the potential to hold out until 2009.
Unlike the dollar-euro exchange rate and the mark-up of oil prices, the price of gold does not directly affect the Bulgarian economy, Deputy Finance Minister Gati al-Djeburi and BNB governing board member Garabed Minasyan said on Monday. That same day gold reached six-year highs on the Japanese and US markets.
The BNB foreign currency reserves include 40 tons of gold, equivalent to about 641 million leva.
The debate was started by the deputy governor of Bulgarian National Bank (BNB), Martin Zaimov, who also heads the BNB department managing the currency board. Speaking at the end of last year, Zaimov that Bulgaria could introduce the euro as early as 2007 and could join the EU even earlier.
The Bulgarian economy had the potential to cope with rising oil prices, according to Zaimov.
He said Bulgaria had experience in coping with high oil prices, following market developments two years ago.
"Although the impact is not positive, it is by no means serious or destabilising," Zaimov said.
"High oil prices have an adverse impact on the Bulgarian economy as it relies heavily on imported energy resources, and also because such price hikes push up inflation. However, the country's economy is in a rather good condition, so this should be regarded not as a significant pressure, but rather as one of many external developments which may be positive or negative," he said.
According to him, the exchange rates of the lev and the euro to the US dollar were not crucial to the Bulgarian economy.
"They are of significance to individual companies: some may gain and others may lose, depending on their positions in terms of dollar-based assets," Zaimov said, and added that the overall effect on the economy was neutral and of minor significance.
The introduction of the euro in Bulgaria would be technically impossible before 2009, Rumen Avramov, an economist at the Centre for Liberal Strategies, told Radio Free Europe last Sunday.
Avramov said the criteria which Bulgaria should meet to introduce the euro were identical to those for the other EU applicants. The two-year transition period should be used to adapt to the common economic policy and to meet the Maastricht macro-economic criteria in the euro-zone.
The two-year period does involve membership in the European common currency mechanism but countries with currency board arrangements such as Bulgaria will have the right to keep the currency board and need not change the exchange rates of their national currency.
The only difference is that their central banks will have to do unilaterally what they are doing currently, that is, to maintain the stability of the national currency or the fixed exchange rate, Avramov said.
In his opinion, the Bulgarian currency board has the potential to hold out until 2009.
Unlike the dollar-euro exchange rate and the mark-up of oil prices, the price of gold does not directly affect the Bulgarian economy, Deputy Finance Minister Gati al-Djeburi and BNB governing board member Garabed Minasyan said on Monday. That same day gold reached six-year highs on the Japanese and US markets.
The BNB foreign currency reserves include 40 tons of gold, equivalent to about 641 million leva.
