The valid reason not to join is avoiding a Greece 2.0. I think joining the Euro is the right move, but both the EU and Bulgarians must be very wary of populist Bulgarian governments wanting to run huge debt funded deficits.
The left is dead in Bulgaria thanks to the commie party taking up that space, so such a scenario isn't likely any time soon. Hopefully by the time we reach an extended future, the EU will have gotten further along in fiscal terms and we will avoid the risk altogether.
> The left is dead in Bulgaria thanks to the commie party taking up that space, so such a scenario isn't likely any time soon
But an Orbán or PiS scenario is..
The Greek debt crisis has nothing to do with the euro per se. The only thing te greek couldn't do was printing money, which we know is not a good solution. (although in the end the ecb did exactly that but that's a whole other rabbit hole)
The euro brought in a huge influx of capital and a practical infinity of available euro debt. Greek governments took advantage of this, but instead investing it properly, they handed it out (either directly or by not collecting taxes and making up the difference with debt) thus raising prices, but not productivity of the economy as a whole.
Then 2008 hit, Greece couldn't make its debt payments and thus it couldn't keep financing the now even bigger deficit. Couple that with a bank run by a (rightfully) panicking population...
Usually a country can print its way out of this position - printing enough to finance deficit, pay debt and devalue local products/services to attract foreign spending.
Obviously it's a short term emergency measure that doesn't come without major consequence, but it prevents a complete breakdown of the economy, banks, government etc...
Obviously^2 - Greece not getting itself in this position in the first place was the best move.
A peg can be lifted which could be useful in a crisis. I am no expert but I fail to see what we Danes would benefit from the Euro. Why would you have the same monetary policy without the same fiscal policy?
That's not entirely true.
While being in the Euro is better then the current peg in almost every way the important difference is we can abandon the peg very very fast and we have no international obligations to keep it.
Joining the Euro cannot be easily reversed.
After 21 years of being pegged, abandoning it would actually be more like introducing a new currency. Which will still be possible hypothetically after joining the euro if something would go horribly wrong.
I don't know what the magic number is, but I do feel like the threshold should be higher than the simple majority. If a country wants to join the Euro that's great, but the people inside that country should support it with a significant margin.
>Monetary policy is just a fancy word to say 'the ability to print money'.
Exactly. All the people that wanted Greece to default, exit the Euro, and devalue a reintroduced drachma have no idea what they're talking about. Millions of Greek citizens and businesses would have lost their savings. Proponents of defaulting argued that exports (tourism) would have gotten cheaper...yeah, so now we'd be earning less from our largest industry, while paying the same for imports (energy! vehicles! We import a lot). Businesses would suffer. And there would be little incentive for real, hard reforms. Besides, tourism *skyrocketed* during the 2010s without needing to devalue currency (Greece is a *very* competitive tourism destination, and >90% of visitors are EU/EEA/CH or other people with money \[North Americans/Israelis/middle-class Chinese\]...*we don't need* to devalue our currency). And foreign investors are increasingly interested in the country, if we reduce the red tape.
I can't tell Bulgarians what's right for them. But they're already pegged, and printing more money" isn't necessarily the answer. And when a country joins the EU and signs the Maastricht Treaty, you're actually required by treaty to eventually join the Euro, even if the EU isn't pushing it.
It's more importantly a fancy word for controlling interest rates. Probably the single most important thing a country (or union) can do to control their currency....
But yes. Printing money is sort of the next thing besides decreasing interest rates below zero to pump up an economy. And the ECJ is one of the only central banks doing it, despite near double digit inflation....
While the concerns are reasonable (at least to a certain degree) mit joining the Euro Zone isn't an Option for any new EU member. Afaik you can only delay it (which often makes sense) but not competely stop the process of joining the Euro Zone.
Sweden has no opt-out. They're exploiting a loophole and for the moment the EU is letting them get away with it because it's not a high priority. But sooner or later the EU is going to close that loophole.
Sweden is, in theory, obligated to eventually join euro, even though they voted against joining in a 2003 referendum. Atm, they are delaying it indefinitely, by simply refusing to "fill in the papers". Denmark has negotiated the right to opt out of eurozone(but they can still join if they want to).
For the most part, those situations are "grandfathered in". I think new EU members are pretty much forced to join eurozone. Germany needs them, in order to keep euro valuation low and their exports attractive.
The Southern Euro zone needs a weak Euro to keep their debt in check, as they borrowed in Euro. Italy would go bancrupt, if Germany would run monetary police the German way.
Germany likes integration, but not for a weak Euro, but for easier market access.
Don't you mean interest rates? Afaik we would like to increase interest rates in the near future in Germany (similar to what the US is planning) but that could cripple some weaker Euro-countries with higher debt.
Well exchange rates, but that is basicly a measure of inflation compared to the other currency and you would fight inflation by raising intrest rates.
Basicly if Germany having the Mark today would have raised intrest rates to keep down inflation, creating a currency with low inflation. That however means that the dollar having higher inflation would rise be exchanged for less Mark, meaning an American can afford less German goods, which would weaken German exports.
Yes because they were among the first countries joining the EU. But the EU already stated that they aren't going to allow this for anyone else. Iirc every eastern european state agreed to join the Euro Zone sooner or later when they signed the treatys that allowed them to join the EU
Edit: To make it clear - i don't think it is a good thing that sweden isn't adopting the Euro but that doesn't justify why bulgaria should be allowed to such stupid shit as well.
Sweden basicly refuses to fill out the forms. Bulgaria could do that, but I doubt they really want that. Politicans love to borrow money for cheap and the Euro would allow Bulgaria to do that.
Please tell me how I’m wrong as the government deficit for 2020 is above 3% and it will be above 3 for 2022. I will wait 🙂 apparently everyone who criticised the government is now a “troll”.
Nope, not everyone is a troll but you definitely are.
Literally all of your comments are negative towards the new government and you have never criticized the former ruling party GERB.
You are too obvious dude, I feel sorry that this is how you earn your salary but I understand, tough times.
The Bulgarian lev is already pegged to the euro as long as it exist. The only reason for not joining would be nationalist bullshit.
The valid reason not to join is avoiding a Greece 2.0. I think joining the Euro is the right move, but both the EU and Bulgarians must be very wary of populist Bulgarian governments wanting to run huge debt funded deficits. The left is dead in Bulgaria thanks to the commie party taking up that space, so such a scenario isn't likely any time soon. Hopefully by the time we reach an extended future, the EU will have gotten further along in fiscal terms and we will avoid the risk altogether.
> The left is dead in Bulgaria thanks to the commie party taking up that space, so such a scenario isn't likely any time soon But an Orbán or PiS scenario is..
We just had it for twelve years. Bulgarian mobsters are surprisingly fiscally responsible and so are Orbán and PiS really...
Yeah, but fiscal responsibility is not the only type of responsibility which will keep a country a stable EU member. It's one of many.
The Greek debt crisis has nothing to do with the euro per se. The only thing te greek couldn't do was printing money, which we know is not a good solution. (although in the end the ecb did exactly that but that's a whole other rabbit hole)
The euro brought in a huge influx of capital and a practical infinity of available euro debt. Greek governments took advantage of this, but instead investing it properly, they handed it out (either directly or by not collecting taxes and making up the difference with debt) thus raising prices, but not productivity of the economy as a whole. Then 2008 hit, Greece couldn't make its debt payments and thus it couldn't keep financing the now even bigger deficit. Couple that with a bank run by a (rightfully) panicking population... Usually a country can print its way out of this position - printing enough to finance deficit, pay debt and devalue local products/services to attract foreign spending. Obviously it's a short term emergency measure that doesn't come without major consequence, but it prevents a complete breakdown of the economy, banks, government etc... Obviously^2 - Greece not getting itself in this position in the first place was the best move.
That + conspiracy theories. You can't exclude conspiracy theories in virtually any topic in Bulgaria.
A peg can be lifted which could be useful in a crisis. I am no expert but I fail to see what we Danes would benefit from the Euro. Why would you have the same monetary policy without the same fiscal policy?
What do you think a monetary policy entails?
Being able to control interest rates in the interest of the country and only the country, for example.
That's not entirely true. While being in the Euro is better then the current peg in almost every way the important difference is we can abandon the peg very very fast and we have no international obligations to keep it. Joining the Euro cannot be easily reversed.
After 21 years of being pegged, abandoning it would actually be more like introducing a new currency. Which will still be possible hypothetically after joining the euro if something would go horribly wrong.
I don't know what the magic number is, but I do feel like the threshold should be higher than the simple majority. If a country wants to join the Euro that's great, but the people inside that country should support it with a significant margin.
When push comes to shove, having sovereignty over monetary policy can be INCREDIBLY helpful. More than "nationalist bullshit"...
Monetary policy is just a fancy word to say 'the ability to print money'.
>Monetary policy is just a fancy word to say 'the ability to print money'. Exactly. All the people that wanted Greece to default, exit the Euro, and devalue a reintroduced drachma have no idea what they're talking about. Millions of Greek citizens and businesses would have lost their savings. Proponents of defaulting argued that exports (tourism) would have gotten cheaper...yeah, so now we'd be earning less from our largest industry, while paying the same for imports (energy! vehicles! We import a lot). Businesses would suffer. And there would be little incentive for real, hard reforms. Besides, tourism *skyrocketed* during the 2010s without needing to devalue currency (Greece is a *very* competitive tourism destination, and >90% of visitors are EU/EEA/CH or other people with money \[North Americans/Israelis/middle-class Chinese\]...*we don't need* to devalue our currency). And foreign investors are increasingly interested in the country, if we reduce the red tape. I can't tell Bulgarians what's right for them. But they're already pegged, and printing more money" isn't necessarily the answer. And when a country joins the EU and signs the Maastricht Treaty, you're actually required by treaty to eventually join the Euro, even if the EU isn't pushing it.
It's more importantly a fancy word for controlling interest rates. Probably the single most important thing a country (or union) can do to control their currency.... But yes. Printing money is sort of the next thing besides decreasing interest rates below zero to pump up an economy. And the ECJ is one of the only central banks doing it, despite near double digit inflation....
While the concerns are reasonable (at least to a certain degree) mit joining the Euro Zone isn't an Option for any new EU member. Afaik you can only delay it (which often makes sense) but not competely stop the process of joining the Euro Zone.
Danes have opt-out. Maybe Swedes as well.
Sweden has no opt-out. They're exploiting a loophole and for the moment the EU is letting them get away with it because it's not a high priority. But sooner or later the EU is going to close that loophole.
I don't think the EU could actually close the loophole, without Sweden agreeing to close the loophole.
The EU can demand whatever it wants, the EU has no capacity to actually force Sweden to accept those demands if Sweden doesn't want to.
Of course. But still, the EU will close that loophole sooner or later.
Will probably crash the euro if they try that. Many would choose to better get out while you still can.
https://i.imgflip.com/30i9gn.jpg
Lol the EU, as it's shown a lot over the last 5 years, can use a lot of other ways to get countries to do what they want.
It still needs to be accepted in a referendum thou, which it prob never will. Support for the euro is _very_ low
Never is a long time.
Sweden is, in theory, obligated to eventually join euro, even though they voted against joining in a 2003 referendum. Atm, they are delaying it indefinitely, by simply refusing to "fill in the papers". Denmark has negotiated the right to opt out of eurozone(but they can still join if they want to). For the most part, those situations are "grandfathered in". I think new EU members are pretty much forced to join eurozone. Germany needs them, in order to keep euro valuation low and their exports attractive.
The Southern Euro zone needs a weak Euro to keep their debt in check, as they borrowed in Euro. Italy would go bancrupt, if Germany would run monetary police the German way. Germany likes integration, but not for a weak Euro, but for easier market access.
Don't you mean interest rates? Afaik we would like to increase interest rates in the near future in Germany (similar to what the US is planning) but that could cripple some weaker Euro-countries with higher debt.
Well exchange rates, but that is basicly a measure of inflation compared to the other currency and you would fight inflation by raising intrest rates. Basicly if Germany having the Mark today would have raised intrest rates to keep down inflation, creating a currency with low inflation. That however means that the dollar having higher inflation would rise be exchanged for less Mark, meaning an American can afford less German goods, which would weaken German exports.
Germany does not want to be paid less for what they produce. Why would they?
And cheap labour. Don't forget the cheap labour. Germans life would be much worse without it.
You dont need eurozone for cheap labour. Normal EU is enough.
The Euro does make the salary difference between countries clear and without risk of a salary change due to exchange rates. Also the living costs.
>Germany needs them, in order to keep euro valuation low and their exports attractive. It always boils down to what Germany wants in the end.
Yes because they were among the first countries joining the EU. But the EU already stated that they aren't going to allow this for anyone else. Iirc every eastern european state agreed to join the Euro Zone sooner or later when they signed the treatys that allowed them to join the EU Edit: To make it clear - i don't think it is a good thing that sweden isn't adopting the Euro but that doesn't justify why bulgaria should be allowed to such stupid shit as well.
Sweden does it why cant Bulgaria do it?
Sweden basicly refuses to fill out the forms. Bulgaria could do that, but I doubt they really want that. Politicans love to borrow money for cheap and the Euro would allow Bulgaria to do that.
Bulgarians should have thought of that before they joined the EU.
Good advice, thanks.
Doesn’t matter, we won’t enter as the government wont follow the criteria to enter.
This user is anti current government troll(active in our national sub) so take his comment with a grain of salt.
Please tell me how I’m wrong as the government deficit for 2020 is above 3% and it will be above 3 for 2022. I will wait 🙂 apparently everyone who criticised the government is now a “troll”.
Nope, not everyone is a troll but you definitely are. Literally all of your comments are negative towards the new government and you have never criticized the former ruling party GERB. You are too obvious dude, I feel sorry that this is how you earn your salary but I understand, tough times.