In early September 2012, Reuters
reported that Bulgaria had “abandoned plans to adopt the single currency in
response to deteriorating economic conditions and rising uncertainty over the prospects
of the European Union. Finance Minister Simeon Djankov was quoted as saying as
much. Bulgaria was at the time the
poorest state in the E.U. (similar perhaps to Mississippi in the U.S.). It is
significant that Bulgaria was one of the least indebted states and was “trying
to stick to tight fiscal discipline to avoid risks to the lev currency, which
[was at the time] pegged to the euro.” In this regard, Bulgaria was like
Finland and Germany in that it faced the prospect of paying for other states’
profligacy and lack of self-discipline. From this vantage point, it makes
perfect sense for Bulgaria to demur. However, the perspective may be
short-sighted in another respect. Specifically, Bulgaria risked missing the
boat on the E.U.
The full essay is in Essays on the E.U. Political Economy," available in print and as an ebook at Amazon.
