Moves by Bulgaria and Croatia to push ahead with plans to join the euro will bolster efforts by the authorities in Brussels to maintain unity in the face of the decision by British voters to quit the EU and Catalans’ demands for independence. However, policymakers will have to overcome opposition within their countries to membership of the single currency.
Bulgaria, which joined the EU in 2007, said it would like to join the euro “as soon as possible,” Marinela Petrova, deputy minister of finance told GlobalMarkets. However, she admitted voters were concerned about the impact on prices, and that support for the eurozone project had waned since the debt crisis that began in Greece in 2010.
“The pro-EU feeling is going down because the ordinary people could hardly see the effects [of EU membership] after the crisis,” she said. However, Petrova insisted that eurozone integration was not for economic purposes, but to add extra stability to the country.
“We want to feel further integrated with the European Union and to share their common goals, especially in the face of planned deepening of the European monetary union,” she said. “It will be a good sign to outsiders that the eurozone is still alive and still attractive to countries outside it,” she said.
50-50 split
Next week, Croatia will begin a public consultation on eurozone accession. Unlike the UK, there is no requirement to hold a referendum on membership, but the response will have a bearing on the political decision making process, Boris Vujcic, governor of the Croatian National Bank, told GlobalMarkets. “Half of the population are in favour and half aren’t,” he said. “It begs for a public consultation, and I hope that support will increase.”
Croatia joined the EU in 2013 and is now on track to join the exchange rate mechanism, a precursor to euro-adoption, but the government has a large task ahead if it is to convince half of the population that their concerns prices will rise once the euro is adopted are unfounded.
“It is almost a myth that prices went up when other countries joined the euro,” Vujcic said. “Another concern is that monetary policy is being given up as a tool of macroeconomic policy, but we are so heavily euro-ized that there isn’t much room for independent policy. We’ve nothing to lose.”
In Slovenia, which is already an EU and eurozone member, public support for the European project remains high, according to Mateja Vranicar Erman, its finance minister. “Despite some voices of scepticism, the vast majority are in favour of European integration, and still show strong support for the European idea.”