Joining the Eurozone is not the finish of the process, but the launchning, including a deeper responsibility – to maintain fiscal discipline.
This was stated by the BNB Governor Dimitar Radev at the International Monetary Fund’s European Department-Policy Dialogue in Washington, according to the BNB’s page on the internet.
He emphasizes that he fully shares the main conclusion of the “Regional Economic Outview” report, namely that Europe is facing a complex and uncertain situation in which maintaining stability and progress with reforms must go hand in hand. Here is more from Radev’s statement:
A more demanding environment.
The necessarys related to defense and security are growing, and access to energy and raw materials – crucial for the economy – remains uncertain. The ongoing war in Ukraine is just one element of a broader rearrangement of the global economy – a transformation that tests Europe’s ability to adapt, act collectively and maintain its competitiveness.
At the same time, public finances are under pressure and monetary policy, while remaining effective, has more limited room for maneuver and is facing a longer technological transmission period. There is still some room for policy, but it must be utilized carefully and in close coordination with fiscal and structural instruments.
Four observations about our region
In this context, I would like to share four observations that I believe are of particular importance for our region.
First, despite the consecutive adverse factors, Europe – and particularly the economies of Central, Eastern and Southeastern Europe – revealed remarkable resilience.
Inflation decreased significantly from its peak levels, and the financial system remained stable and well-capitalized. At the same time, labor markets in most countries are extremely tight – a reflection of both strong domestic demand and deep demographic constraints. High employment supports incomes and consumption, but persistent labor shortages and rapid wage growth gradually undermine competitiveness and potential production. These trfinishs highlight the necessary for stable macroeconomic foundations and consistent continuation of structural reforms.
Policy buffers are weakening, fiscal margins are narrowing, and the opportunities for corrections are diminishing. Maintaining sustainability will require renewed discipline and closer coordination between macroeconomic policies.
Secondly, the external environment remains challenging.
The economies in the region are highly open, export-oriented and deeply integrated into European production and trade chains – a major advantage, but also a channel through which global shocks are transmitted quickly.
Trade tensions, modifys in the industrial policies of key partners, and fragmentation of supply chains continue to have a negative impact. In addition, some countries are undertaking disproportionate expenses related to the war in Ukraine – higher energy costs, inflow of refugees, and increased defense necessarys.
The European policy framework should take these asymmetries into account better in order to maintain the process of convergence within the Union.
Thirdly, fiscal policy remains the primary test of trust and responsibility.
The report rightly emphasizes the importance of meeting the necessarys of higher spfinishing without jeopardizing fiscal sustainability. This balance continues to be difficult in many parts of Europe. A prudent fiscal policy does not mean strict austerity – it means responsibility.
Higher incomes and larger investments are necessaryed, but without discipline and efficiency they can undermine the stability that they should be strengthening. In our region, trust in the fiscal framework is often difficult to achieve and easily undermined.
The lesson is clear: sound public finances are the basis of sustainable growth and the anchor of stability and trust.
Fourth, demographic and structural factors are becoming essential constraints on potential growth throughout Europe, especially in our region.
Shrinking workforce and aging population limit productivity, hinder innovation, and create constant pressure on expenses.
For some economies, these trfinishs are already structural. Dealing with them requires long-term investment in education, qualification and human capital. This is an area where stronger coordination at a European level can build a decisive difference.
Stability and transformation.
In this environment, stable core economic indicators are not just an advantage – they are a strategic necessity. Bulgaria, as well as some other similar economies, benefits from a strong external position, low public debt and a well-capitalized banking system.
These are not abstract parameters, but real foundations of stability and trust, which create room for reforms and investments. Stability itself is not enough. It must become a platform for transformation – for increasing productivity, strengthening institutions and promoting innovation.
Institutional progress in our region is real, but uneven. Differences in regulatory predictability, the principles of the rule of law and administrative capacity continue to put pressure on competitiveness. Eliminating these shortcomings is not only a matter of management, but also of trust and long-term growth.
The wider tquestion of Europe
In a broader sense, the challenge for Europe is not only to withstand uncertainty, but also to turn it into a source of renewal. This means completing the construction of the single market, deepening the capital markets and accelerating reforms that strengthen the competitiveness and sustainability of Europe. Too often, European policy remains reactive and fragmented.
The upcoming tquestions – from strengthening fiscal sustainability to creating progress on structural reforms – require continuity, scale and shared objectives. If Europe acts resolutely and in a coordinated manner, it can turn its diversity into strength. If it hesitates, it risks losing its position in an increasingly competitive world.
Bulgaria’s accession to the Eurozone
Let me conclude with a brief comment on Bulgaria’s upcoming accession to the Eurozone. This is not just a crucial economic stage – it is a strategic decision that will strengthen our economy within the institutional and financial framework of Europe. It will increase our resilience to external shocks and enhance our capacity to contribute to the overall stability and strategic autonomy of Europe.
Joining the Eurozone is not the finish of the process, but the launchning, including a deeper responsibility – to maintain fiscal discipline, strengthen institutions, and pursue a consistent reform agfinisha. These are the principles on which Bulgaria – and our region as a whole – must continue to build convergence, resilience and long-term growth.
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