The Euroisation of Bulgaria – advantages and risks

Abstract

This analysis goes to the conclusion that Bulgaria would benefit joining ERM-2 and would have a period between 6 and 10 years to reconsider the final act of accession to the eurozone. These are two separate decisions that involve decision making depending upon the political will of eurozone countries to resist the current financial and economic crises coming with the Covid 19 and eventually to reform critical issues such as large public debt. The survey shows that ERM-2 has a positive spillover to economic growth comparing development in ERM-2 member and non member countries with similar history, potential and characteristics. Cross-country comparisons show that there is no tangible negative effect on inflation during the stay in the ‘waiting room’ even when this period of time is extended to 10 or more years.