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SIMEON DJANKOV: BULGARIA IS AMONG THE FOUR EU MEMBERS MEETING ALL MAASTRICHT CRITERIA

21.05.2012

 

An interview of Deputy Prime Minister and Minister of Finance Simeon Djankov for Reuters.

 

E. Europe euro hopefuls disorientated by crisis

* Countries uncertain over euro entry plans due to crisis

* Euro aspirants say bloc\'s original rules should stand

* Only states in EU meet Maastricht criteria for euro

 

By Michael Winfrey and Michael Dolan

 

LONDON, May 19 (Reuters) - Plans of the few Eastern European states still trying to join the ailing euro zone are at risk due to the crisis in the single currency but they insist the bloc should stick to its original rules instead of altering them for countries like Greece.

Speaking at the European Bank for Reconstruction and Development\'s annual meeting as the euro crisis intensifies around Greece\'s possible exit from the bloc, officials from countries still with firm commitments on joining the euro said those plans depended on how the euro zone crisis played out.

Many were frustrated by discussions that previously strict rules governing euro entry - the Maastricht Treaty criteria on currency stability, government debt, budget deficits, inflation and interest rates - were being changed or softened to accommodate the difficulties of existing members such as Greece.

And they were unsympathetic to pleas for leniency for Greece, in part because they felt its crisis was partly a result of misleading statistics and they had received little leeway in their stringent preparations to join the bloc.

\"If you do not abide by these rules you can\'t expect help just because you are in trouble,\" Bulgaria\'s Finance Minister Simeon Djankov told Reuters on Saturday.

He noted that of the EU\'s 27 members only four - Estonia, Finland, Sweden, and non-euro-member Bulgaria - met the Maastricht criteria.

Poland\'s deputy finance minister Jacek Dominik went further and insisted that being strict with rules and staying consistent about applying them was as important as the euro\'s survival.

\"If you want to keep the euro zone alive you have to make certain commitments,\" said Dominik.

\"You have to commit to certain standards and that all people are playing the same game. We can\'t cheat each other any longer with statistics or say that our deficit or debt is much lower than it is actually because we know what is the consequences.\"

 

MOVING GOALPOSTS

Djankov said Bulgaria saw the euro surviving this crisis and his country still wanted and expected to join on a two/three year horizon. But he acknowledged that no timeline could now be certain as the bloc and its institutions get reshaped.

\"It\'s not at all a point of discussion, the date of joining the euro for Bulgaria, because the rules are not clear on whether there are going to be more additional rules (or) some additional institutions, (which) are being discussed.\"

The two-year old euro debt crisis took a fresh turn since Greek and French elections on May 6. Greeks voted heavily against parties supporting its euro bailout programme of budget cuts even though polls show them still in favour of the euro.

The victory for socialist party candidate Francois Hollande in French presidential elections has, meantime, forced a rethink of the EU\'s new fiscal pact from December and is likely to see those strict budget limits at least balanced by growth-supporting measures and maybe even less stringent deadlines.

The east European officials were at pains to emphasise their continuing commitment to joining the 17-member currency union at some stage should the currency survive this storm.

But they expressed uncertainty because the shape and nature of that union was changing due to this current crisis and moving goalposts meant any firm plans right now were unwise.

Latvia\'s Finance Minister Andris Vilks told Reuters on Friday his country had only more than 50 percent chance of joining the euro in 2014 as planned, even though the country was battling to meet the Maastricht rules.

\"We will be able to meet all the Maastricht criteria next spring. But of course the final solution will depend on the situation in the euro zone,\" Vilks said. \"At this moment, there is a 90 percent (chance) that we will meet the Maastricht criteria. For joining... more than 50 (percent).\"

 

THIS YEAR CRUCIAL

Of the 10 ex-communist states that have joined the European Union since 2004, Latvia and neighbour Lithuania are the only ones to retain fixed target dates to join the euro. Three others - Slovenia, Slovakia and Estonia - have already joined.

Latvia poses a special example for euro zone countries because it enacted swingeing austerity measures during the crisis that wiped out over a fifth of its gross domestic product but it has since recovered to become the EU\'s growth leader.

Vilks said the euro zone\'s gatekeepers may tighten rules, while the prospect of entering an unstable currency would be tough to sell to Latvian voters if no solution was found.

\"Any more painful decisions should come faster. This year is crucial for the euro zone, not next year. There is no time to wait,\" he said.

Despite their ongoing struggle with crisis management within the bloc, euro zone officials at the EBRD meeting still attempted to calm those outside.

\"This crisis is having an impact beyond the borders of the euro zone, these tensions are having an impact on macro-economic developments,\" said Fabrizio Saccomanni, deputy governor of the Bank of Italy.

But \"the attraction of this project still remains. The European Union has a history of progressing through crises, this is a somewhat more serious crisis than we have had before but it is going to be addressed.\"