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Dublin: 10 °C Saturday 19 April, 2014

Poland and Bulgaria shelve plans to join Eurozone

The Eurozone debt crisis and the likelihood of a double-dip recession mean little appetite for joining the single currency.

Image: Rene Fluger Josef Horazny/Czech News Agency

POLAND AND BULGARIA have put their ambitions to join the Eurozone on ice – fearing that the crisis consuming the single currency’s smaller nations could swallow them up if they were to adopt the euro.

In an interview with the Wall Street Journal, Bulgaria’s prime minister said he had decided to shelve the plans as the European economy continued to deteriorate – circumstances which had dampened any public support.

“The momentum has shifted in our thinking and among the public,” Boyko Borisov said. “Right now, I don’t see any benefits of entering the euro zone, only costs.

The public rightly wants to know who would we have to bail out when we join? It’s too risky for us and it’s also not certain what the rules are and what are they likely to be in one year or two.

Bulgaria has so far managed to keep its budget deficit within the European limit, restricting it to 2.1 per cent of GDP last year after cutting back on pay and pensions. The country is one of Europe’s poorest, however – with its circumstances so weak that its currency is already pegged to the euro.

Poland’s foreign minister meanwhile said that while his country had passed a referendum on euro membership, it wouldn’t rush into seeking membership until the currency’s broader problems had been sorted out.

In times of crisis we must first restore confidence,” Radoslaw Sikorski told the Frankfurter Allgemeine. “This crisis is only superficially about money: it is also about credibility.”

He added:

You can hardly blame us – that we don’t want to join as long as the Eurozone is in a serious crisis. We are willing to join, if you have solved your problems.

Lithuanian prime minister Andrius Kubilius last week said his country would only go about seeking euro membership when the continent itself was ready.

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