Bulgaria's presence in ERM II gives us the assurance that we have the approval for a further step and nothing else. The idea behind this mechanism is that countries having a floating exchange rate and serious fluctuations in the national currency against the euro could gradually reduce fluctuations, until finally the exchange rate is fixed at one level and the national currency is replaced by the euro. Since this fixing took place in BG 20 years ago, the main purpose of the currency mechanism is meaningless. This is what the financier Emil Hersev said on "The World is Business."
In his words, Bulgaria's entry into ERM II is foreseen as a stage of joining the euro area and cannot be avoided. The expert pointed out that it is, however, a general rule for all countries. "That's the basic idea, but it's not the only one. During this period the market infrastructure is expected to be built up and the BNB's capacity to work with the European system of central banks, "said Hersev. He is adamant that there will be no change in BGN exchange rate and added that panic and mass purchase of the euro take advantage of people's fears. "This text, which has now been adopted, means that the exchange rate of the lev to the euro can only be changed by agreement within the Euro-group, it cannot be altered by Bulgaria unilaterally."
The expert also pointed out that many things will change when Bulgaria becomes part of the Eurozone, all of which to the good. "The most important advantage is the elimination of the currency board deep defect – this is a system with no last resort lender – the central bank is forbidden to refinance the banks. The banks in our country hold three times the liquidity reserves, ”Hersev explained. "Going into the eurozone, the need to secure the lev will be eliminated – so € 18bn can be used but not for running costs. With that money, Bulgaria can buy back its foreign debt,” he added.
He said that the green deal could be taken advantage of when Bulgaria became part of the eurzone. "Then we will also have access to refinancing from the European Central Bank, including Bulgarian government's securities will become part of those refinanced by the ECB, "the expert explained.
On the commissioned audit of privatization by the Prosecutor General Hersev noted that he did not expect such results as termination of deals, foreclosures,recoveries of payments.
