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SPIEGEL: If Bulgaria accepts the Eurozone, the EU will create another problem

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The European Union seems to be in danger of creating another problem, as if it has learned nothing from the Euro crisis. “

This was written by the German magazine “Spiel” in a commentary entitled “Controversial accession to the Eurozone: Concerns are growing as Bulgaria prepares to join the euro.”

“Bulgaria has significant problems with corruption and money laundering. However, the EU is preparing to accept the country as the next member of the Eurozone. Many fear it is a bad idea,” wrote authors Ralph Neukirch and Michael Zauga. Their article, published in the German weekly, is illustrated with a poster from last summer’s protests, in which the then Prime Minister Boyko Borissov was depicted with a face mask in the form of a 500-Euro banknote.

The two journalists talked for more than an hour with the former caretaker Finance Minister Asen Vassilev and commented that after that “one first begins to wonder if it is such a good idea for Bulgaria to join the single currency”. The text does not reveal more than this conversation.

With one exception – when telling what happened after the sanctioning of Delyan Peevski, Vasil Bozhkov and Ilko Zhelyazkov: “Bulgaria’s new government welcomes Washington’s move. But reformers do not expect the EU to use the same approach. When it asked the Americans for help in the fight against corruption, it arrived two days later,” Vassilev said. He also says he has not received any help from Germany. “

It is not clear when the journalists talked to Asen Vassilev, but they quote Borissov’s words “If you can’t, call me, I’ll do the job”, which he said on August 29, and that in November Bulgaria will go to parliament for the third time. elections this year. “The longtime prime minister has personally undermined democracy in his own country. He has weakened the independence of the judiciary and awarded public contracts to local oligarchs. Because he was more discreet than the governments in Hungary and Poland, Borissov has generally avoided harsh criticism from Brussels and Berlin. it has been felt in Bulgaria for a long time. “

Neukirch and Zauga illustrate this conclusion at the outset, describing that Minister Vassilev received them in a spacious press conference room with a “very interesting story.” “It is believed that here his predecessor received bags of money probably for the exchange of political services”

“Vassilev brutally candidly describes the crisis in his country’s political class. Public procurement contracts awarded for years without tenders and auctions. A significant problem is the lack of effective control and money laundering.”

But can the EU stop or delay Bulgaria’s accession to the eurozone, the authors ask.

They recall that in early June, Sofia presented a detailed plan of measures to prepare for the adoption of the Euro from January 1, 2021. This was done by Vassilev, who “is a great starting point if anyone is interested to know if his country is ready. to join the Euro area “.

The chances that this plan will become a reality are not bad at all, writes SPIEGEL. Bulgaria has met all the formal criteria met by the budget deficit, government debt and inflation, and the lev exchange rate is already pegged to the Euro. “Last year, together with Croatia, the country became part of ERM II and the banking union, which means that the changeover to the Euro is irreversible. Even the ECB no longer has the right to veto. Only the exact moment can be chosen appropriately. (…) But really does it make sense to accept a country with long-standing problems with corruption, money laundering and financial supervision “.

The MEPs from the group of the “Greens” Sven Gaigold and Daniel Freund, who visited Bulgaria, as well as Hristo Ivanov from “Yes, Bulgaria” are quoted. Guigold says the country is welcome in the eurozone, but once it has tackled corruption and money laundering problems to avoid a repeat of the situation with Cyprus and the Baltic states, a member will become a center of major money laundering. Freund sees the process as an opportunity for Bulgaria to improve its financial sector with the help of the European Commission and the ECB.

“Bulgaria has several sectors with a combination of corruption, mismanagement and direct or indirect state control, which has caused the accumulation of losses and factors of instability,” Ivanov explains. Both he and others recall the problems for the eurozone created by Greece’s accession, SPIEGEL added. According to the publication, leading politicians in Bulgaria believe that the Eurogroup should reconsider its intention to soon accept Bulgaria into the common currency zone.

This is where the name of Chief Prosecutor Ivan Geshev comes from, mentioned – according to the publication – by representatives of the civil sector and anti-corruption initiatives as one of the biggest obstacles. “Many problems facing Bulgaria cannot be solved quickly, even if there is motivation” (among politicians). Adela Kachanova of the Bulgarian Helsinki Committee was quoted as saying that as long as he continued to block corruption investigations and defend politicians and oligarchs, nothing fundamental would change.

The following are citations of uncertainties in the forecasts of various international institutions for the maintenance of low inflation, structural problems of the economy, many regulatory barriers and the banking sector with a relatively high share of bad loans. Also, with the entry into the Eurozone, prices may rise rapidly, which will force the government to increase social benefits.

MEP from the Bavarian Christian Social Union Marcus Feber says: “I am in favor of waiting longer. Otherwise, Bulgaria will quickly become another Greece.”

Hans-Werner Zinn, former head of the Ifo Institute of Economics in Munich, is even more critical: “Bulgaria saw from Greece how cool it is when you are allowed to print money recognized in other countries,” which he said is a privilege that “will cause an inflation boom” in Bulgaria, “which will eventually deprive it of competitiveness and turn it into another net recipient of money in a European transfer union”.

SPIEGEL is considered a publication close to the Social Democrats. Olaf Scholz, the finance minister, surprisingly increased the GSDP’s lead over the PDS / HSS conservatives to 6 points a week before the parliamentary elections. In the election debates, he and his party were accused of bringing to power a vision of a social union in Europe unacceptable to the right, in which ordinary workers in Germany would pay unemployment benefits in countries such as Bulgaria. The Social Democrats respond that this is “nonsense.”

Angela Merkel’s government has approved – as a one-off action – the EU Recovery Plan, in which, for the first time, Germany has committed itself jointly and severally to covering other Member States’ obligations arising from the issuance of common debt bonds.

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