The absence of a common clear and precise fiscal policy in the European Union, the planned debt derogation and the additional burden of 150 billion euros out of the 800 billion euros promised for the military industry and defense in foreign member states, all this is shaking the common European ship. This means that whoever knows how to pull the rug in faster and more successfully, wins. This was said by economist Prof. Boyan Durankev in the program "Morning in Focus" on Radio "Focus".
"The euro united the countries' currencies, and this is the good news, but it did not unite the economies, and this is the bad news. That is, the euro is like marriage - everyone is – everyone is "for" until they start paying bills. So we actually have the so-called "differential rent", which creates a common currency union, but a two-speed Europe - Germany and France and everyone else, thanks not to the euro, which unites the money, but thanks to the fact that Europe still does not have a clear common economic and fiscal policy," he is categorical.
In his words, when Bulgaria enters the eurozone, the Bulgarian economy will not be affected by any of the other member states increasing or decreasing their debt. According to the expert, non-compliance with the basic rules in the eurozone, namely a 3 percent deficit and up to 60 percent total debt to GDP, leads to the erosion of the Union's discipline and to the search for justifications for excessive spending with the Russian threat. This leads to a large debt that will be paid off for generations to come, he believes.
"Bulgarian debts may seem very small as a share of GDP, but Bulgaria's demographic picture is one of the worst. The threat to the country's financial stability in general is already visible under this government, which claims to have balanced things, and will become even more visible after 2025, when a large part of the debts will have to be returned and higher pensions will be paid to more people. And then there is no salvation anywhere, except for an internal change in fiscal rules and the introduction of a progressive tax to fill the budget,“ pointed out Prof. Durankev added that it is possible to pay off debts by releasing the BNB's reserve of 37 billion euros upon our entry into the eurozone, as well as to make possible investments and increase the country's fiscal reserve.
According to the economist, prices will inevitably go up upon the adoption of the euro in Bulgaria, because the introduction of the euro and the replacement of the national currency usually leads to a short-term increase in inflation, because business uses this very moment to round prices up. "The average increase in prices upon entry into the eurozone is from 0.2% to 0.9%. But the large share of the shadow economy leads to a sharp increase in prices, and Bulgaria is a champion in the shadow economy. So we expect inflation to be up to 2% more than the usual 2%.“
According to the economist, the advantages of adopting the euro are great, especially in the turbulent global turmoil and the loss of confidence in the dollar and market shocks after the exotic duties and tariffs introduced by Trump. “Another expected positive phenomenon in connection with the euro is the implementation of the idea of an electronic euro or digital euro, which has quite serious advantages, such as reducing the risk of banking crises, there will be better financial inclusion and much better control over the movement of money in the EU system, and hence a reduction in the gray sector in all European countries.“
Prof. Durankev pointed out with bitterness that the missing explanatory campaign is something normal for responsible institutions in Bulgaria. “In my opinion, an explanatory campaign is not needed given that there is not enough democracy in the institutions in Bulgaria. There are 2-3 centers of influence in Bulgaria that determine the rules of the game and dictate what music to be played, especially in the National Assembly and the Council of Ministers. So there is nothing for Bulgarians to ask, there is no need for an explanatory campaign, therefore the Bulgarian will accept the next political morsel that is being served to him, without any particular excitement, because not on January 1, but on January 10 next year he will understand that the medicine that is being served to him is not so scary.“