Bulgaria Takes Step Towards Eurozone 'Waiting Room'

Finance ministers of Eurozone countries and the European Central Bank, ECB, on Thursday welcomed Bulgaria's intention to "put in place the necessary elements for a successful entry into ERM 2" - the so-called "waiting room" for the Eurozone.

In a statement issued after the meeting they said Bulgaria can launch its formal bid to enter into close cooperation with the ECB, allowing for the European bank to comprehensively assess its banking sector and prepare it for entering the European Banking Union.

Bulgaria, which previously did not wish to join the Banking Union before entering ERM 2, recently changed its tactics.

In a letter to the President of the ECB and the Eurogroup ministers, signed 29 June, the Bulgarian authorities expressed their intentions to simultaneously become part of both institutions before July 2019.

The ECB, however, is not pledging to get into an association agreement with Sofia by a specific date.

In its Thursday decision, the Finance ministers and the ECB note that the Bank "could be expected to conclude its comprehensive assessment within approximately one year after Bulgaria's formal application for close cooperation, and its decision may make the start date of close cooperation" - but adds that any final decision will be conditional on "Bulgaria's progress in implementing the possible measures required in relation to the results of the comprehensive assessment".

In practice, this means the Frankfurt-based banking supervision organ can impose additional criteria while they assess Bulgaria's financial system.

The ECB leaves a loophole to prolong the process, as with the European Commission's June promise to Macedonia and Albania to open negotiations for EU membership within a year, on condition that...

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