Leading companies from different sectors, state institutions, banks and experts shared their experience and expectations for the future of the country in the euro area.
The forum "The Euro, Bulgarians and Business" brought together leading companies from different sectors, institutions, banks, investment managers and experts who shared experiences and made forecasts for the future of our country in the euro area and all the challenges associated with it.
We live in a globalized but increasingly closing world, said Darik Radio CEO Hristo Hristov, who opened the forum at Planet Schwarz Tech Theater. He said that uncertain and turbulent times are ahead for Europe and the world and how this will affect our country is the point of the discussion organized by Darik business review.
In the discussion "Bulgaria in the euro area - what is changing for business" took part the Vice President and Chief Financial Officer of the Bulgarian Industrial Association (BIA) Stanislav Popdonchev. He said that the business is aware of the benefits of adopting the euro and membership in the euro area and is ready to take the necessary actions to align its activities with the new currency. "For four consecutive years now, the results of the BIA annual survey show that the active part of the Bulgarian business is in favour of adopting the euro. However, it is important for businesses to have prior information on when exactly the new currency is adopted, because it takes between 4 and 6 months to solve technical issues such as the replacement of the software of the fiscal devices and updating the business software," said the Vice President of BIA.
Stanislav Popdonchev paid special attention to the political discourse on the issue.
"Political talk is very important in the process of preparing for our euro area membership. It is not so much the readiness of the business to accept the euro, but to what extent our politicians accept this as a task. On Monday, a representative of the new political force (ed. "Velichie"), which will be represented in parliament, took part in a national media programme, saying that they do not support joining the eurozone and adopting the euro, as this would lead to the Bulgarian government's inability to issue debt without the discretion of the European Central Bank (ECB). This is completely untrue," the BIA vice-president said.
Popdonchev pointed out that countries that are part of the euro area usually issue debt at much lower prices and have the protection of the ECB, even when the issue is not very attractive for investors, the bank will take part of it.
"There is nothing wrong with there being people who are against Bulgaria's membership in the euro area, but it is good to base this on facts. It is important which people form the attitudes in society, because when fear is instilled, we end up with hysterics", the BIA vice-president stressed, adding that the inflationary effect of the euro adoption is similarly speculated.
"The inflationary effect of adopting the euro in Croatia in 2023, the first year of its accession to the euro area, was an increase of 0.2% and this given that inflation in Croatia was 8.4% before joining the euro area, i.e. the additional effect is negligible", the BIA vice president said.
In the conversation Stanislav Popdonchev pointed out that the benefits of our accession to the euro area are indisputable:
- a more secure economic environment for investors;
- reducing transaction costs;
- accelerated change in the regulatory environment, infrastructure and quality of public services;
- easing of permitting and control regimes; reforming national strategic governance;
- increased private sector involvement in major infrastructure projects; extensive use of concessions;
- reducing the share of the informal sector and unfair competition;
- etc.
"The euro area is a club of trust. It is not right to say that we are going there. It is correct to say that we are accepted", the BIA Vice President clarified.
Regarding the impact of eurozone membership on the capital market in Bulgaria, Popdonchev said that in the last few years the Bulgarian Stock Exchange has made a number of improvements to increase the attractiveness of the Bulgarian stock market, including through the launch of the BEAM market. Eurozone membership will contribute to increasing the confidence in Bulgarian small and medium-sized enterprises of both foreign and Bulgarian investors.
In connection with the expected further postponement of the adoption of the euro in Bulgaria, Popdonchev said that for businesses this is not a new problem, but another missed benefit. "The postponement of the euro adoption has image and direct negative financial dimensions for business. This translates into a lack of trust, fewer new investors, less investment and a better environment for the grey economy," said the BIA vice president.
