After the technical transition to the euro, the country is entering a crucial period in which stability is no longer a given, but the result of active policies and difficult reforms. This was said on the air of “Your Day“ on Nova News by senior analyst from the Institute for Market Economics Petar Ganev.
According to him, the introduction of the euro brings certainty for monetary stability, but does not automatically solve the country's deep structural problems. After the emotions surrounding the currency change subside, the time has come for a serious conversation about Bulgaria's long-term goals – economic, fiscal and social.
„Over the past 28 years, our success has been due to economic freedom, stable money and access to European markets. Now we must continue on this path, but in the conditions of a new political and social reality“, the expert pointed out.
Ganev emphasized that Bulgaria is already facing the problems of more developed countries - labor shortage, aging population and the need for higher productivity. The country is approaching 70% of the average European income - a threshold after which emigration pressure decreases and the benefits of the higher standard begin to be felt.
„The World Bank already classifies us as a rich country. This also means a new type of challenges - not just to get children back to school, but to guarantee quality education; not just to reduce unemployment, but to activate people who are permanently out of the labor market“, he commented.
According to the analyst, membership in the eurozone is a strong positive signal to investors, but it is not enough. Political instability, lack of clarity about tax policy and the country's presence on the “grey list“ for money laundering remain serious obstacles.
“Leaving the grey list is important, but it is more of a technical step. It does not automatically solve the problems with corruption and the rule of law“, emphasized Ganev and added that without stable governance, there is no way to pursue consistent long-term policies.
According to the expert, Bulgaria has the potential to move towards a balanced budget without raising taxes and without accumulating debt for future generations.
“In an ideal situation, we could make a balanced budget right now, because there are elements of overheating in the economy – especially in lending and the labor market. In practice, however, this requires time and a clear plan“, he pointed out.
Ganev recalled that after the introduction of the currency board, the state debt was reduced from about 80% to 20% of GDP – proof that the country can maintain financial discipline without permanent deficits.
According to the Institute for Market Economics, the key to sustainable growth is a more efficient state and redirecting resources to human capital - education, healthcare and productivity.
“We need to set clear, measurable goals - for example, to increase life expectancy or improve PISA results, and not just chase a percentage of GDP for a given area“, said Ganev.
The euro is not a guarantee of higher incomes, but it creates conditions for accelerated development, the expert added. According to him, it is entirely possible for Bulgaria to reach the average European income levels within a generation.
“The ambitious but achievable goal is to be the fastest growing economy in the eurozone in 2026, and in the following years to rank among the countries of Central Europe - Slovakia, Lithuania, Croatia“, he said.