Is it possible to introduce the euro in parallel to the lev? According to Bulgarian businesses, the best option is the fastest adoption of the European currency, rather than its prolonged parallel use.
Last week, the finance minister announced that talks are underway with the European Commission and the European Central Bank about whether it is possible to use the euro and the lev together before Bulgaria is admitted to the Eurozone. The ECB told BNT that such a practice does not exist for countries that are not accepted into the Eurozone. However, what are the possibilities in practice for this to happen?
The fastest possible adoption of the euro is the better option for Bulgaria than the prolonged parallel use of the two currencies. This is the position of the business. The lack of an information campaign and the multitude of questionnaires are also a big problem, experts explain.
Bulgaria’s negotiations with the ECB and the EC are a clear political sign of the country’s accession to the Eurozone, which will also help to reduce fears in the Bulgarian society. However, the model of prolonged parallel use of the two currencies may lead to problems, the Bulgarian Chamber of Commerce (BCC) points out.
“It is not known in our country, there is no data in any other Eurozone member country that has implemented a similar mechanism. We must strive to introduce the euro as quickly as possible and not maintain parallel mechanisms,” said Stanislav Popdonchev, Deputy Chairman and Chief Financial Officer at BCC.
Companies in the various economic sectors will need clear parameters for the work and a buffer between 3 and 6 months to fulfill them, the employers’ organization explains. A good example of the introduction of the euro is Croatia, experts point out:
“In Croatia, which I looked at recently, the deadline for parallel work was from September 2022. For four months they worked in parallel with their currency, the Croatian kuna and the euro, and only 15 days after the introduction of the euro. It seems to me that such a deadline is completely normal, but the state needs to take some additional actions in this direction. Like in Croatia, the banks were obliged all this period to exchange all overvaluations against the fixing, which is the Croatian national bank, and this is a huge relief, and I think the state also should think about this in our country,” said Hazaros Chetinyan, manager of an accounting firm.
The industry also points out that the period for using the two currencies can also serve to adjust to the euro, for example, to readjust the accounting software.
“The companies that develop them must prepare earlier and this is an opportunity to see where the breakthroughs are, what the pitfalls are in rounding, because the exchange rate 5 digits after the decimal point must be used,” explained Raya Petrova, chairman of the Association of Accountants and Accounting Firms.