Bulgaria and Croatia should continue to work to stabilize their economies and improve their institutions before joining the euro, said Fabio Panetta, a board member of the European Central Bank.
Reforms on both sides will not correct all the imbalances and vulnerabilities they face, and more progress is needed to improve governance, their legal framework and the overall quality of institutions, Panetta told Reuters.
The two countries were admitted to the ERM II mechanism on Friday, in the “waiting room” of the Eurozone, with accession expected to take place in 2023.
Earlier, European Commission Vice-President Valdis Dombrovskis said: “What is important now is that while in ERM II Bulgaria has to meet the Maastricht criteria related to budget deficit and debt. In terms of fiscal criteria, the country has already made progress, but inflation criteria and, in the long run, interest rates must be met.
Bulgaria must also meet the legal criteria, and in particular the independence of the central bank, which must fully meet the requirements of the eurozone. In any case, the country must be in the waiting room of the eurozone for at least two years before the evaluation of the fulfillment of the Maastricht criteria begins”, Dombrovskis stressed./ibna