Boryana Pencheva, Deputy Minister of Finance: We will not pay anything for Bulgaria's accession to the Euro Plus Pact

ludmila.kuiumdjieva@klassa.bg



- Mrs. Pencheva, the Ministry of Finance forecast that the economic growth of the Bulgarian economy until 2015 will be about 4%. Which, however, will be the sectors that will drive the economy forward and will support the planned growth of GDP?
- We are expecting a really sustainable and stable growth. It will not be very high but it will be sustainable. This year's plans envisaged that it will reach 3.6%, while in 2012, it will be 4.1%, in 2013 - 4.4%, and in 2014 - 4.2%, whereas the key driver of this growth will be exports. According to our estimates, each of these years, exports of goods and services will grow by around 7-8% minimum. I even think that our current estimates may be defined as conservative, given that data from the beginning of the year is very encouraging and exports grew by around 60%. This is not only due to the price effect and the higher prices of our export commodities but also resulted from the increased volumes and diversified markets.

- Bulgaria joined the Euro Plus Pact, which is even more frequently cited by analysts as the new European Union. Bulgarian politicians pointed out to quite a few pros and cons on that issue. What, however, are the real benefits to our country from Bulgaria's accession to such a joint project and what will be the amount that we will have to pay?
- This is a political commitment for conducting a better, enhanced coordination between EU countries having acceded to the Pact. Better economic coordination is aimed at greater competitiveness, higher employment opportunities, sustainability of public finances and financial stability.

I emphasise that the Euro Plus Pact is a political commitment for the sake of the attainment of common objectives. This is not an organisation to be joined by the deposit of a subscription fee and we do not have to pay anything for acceding to it. The European Council in late March decided also to establish permanent mechanisms for ensuring the Euro area financial stability and they will not operate under the Euro Plus Pact. The Pact involves countries from and outside the Euro area, while they committed themselves to pursue a coherent economic policy aimed at the attainment of the four objectives.

This is favourable for Bulgaria because we are joining this club of Europe which draws up the general economic policy. We will participate in discussions and will jointly plan the measures. Our GERB (Citizens for European Development of Bulgaria) government supports precisely such a policy and we can expect recognition for everything implemented by us so far. Currently, Bulgaria is ranked among the top five countries with the lowest deficit. It is ranked second in terms of the lowest debt, thus emerging as a financially stable country from the crisis. The Euro Plus Pact will lead to financial stability in the EU.


- As regards the European Stabilisation Mechanism (ESM) what will be the amount for Bulgaria to pay upon its accession to the ESM?
- When we accede to the Eurozone, we will automatically join the ESM. The European Council session held in late March defined a budget framework of €700 bn, guaranteeing a loan capacity of €500 bn. The specific amount of the contributions, however, will depend on the number of parties involved, contingent on their GDP. Bulgaria's contribution, according to preliminary estimates, will be €340 mln.

- The Bulgarian three-year fiscal plan aims at the reduction of the budget deficit and at raising economic growth targeted at the adoption of the Euro. What are the main parameters to be achieved and what are the forecasts of the Finance Ministry for Bulgaria's accession to the Eurozone?
- We have a predictable fiscal policy. The deficit, which is one of the lowest in the EU, will be reduced further. For this year, we expected it to reach 2.5 % of GDP, while for the next one we are anticipating it to fall to 1.5 % and in 2013 – to drop by another 0.5 %. We envisage reaching a balanced position at the end of this three-year period by raising revenues, increasing tax collection and boosting productivity.

I want to emphasise that, as of January 1, Bulgaria is ranked as the country with the lowest taxes in the EU and no increase in tax rates has been provided for. There will only be an increase in some excise duties, which should gradually reach the minimum EU levels. Besides, reforms for the acceleration of the process of EU funds absorption are envisaged. Concerning Bulgaria's accession to the Euro area, we could cover the technical criteria for entry into ERMІІ even now, but it is a matter of a political decision that should be taken at the right moment.

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