Levon Hampartzumyan to FACTI: We have been in the eurozone for 80% of 1997

Are we ready for the challenge of adopting the euro and what to expect… Financier Levon Hampartzumyan speaks to FACTI.

- Mr. Hampartzumyan, is President Radev scaring us with the increase in prices until we adopt the euro, or is he telling the truth. What do you think…
- I don't want to comment much on President Radev, because we have to respect the institution and the person in the institution. Now his advisors have told him something about raising prices. And this can be interpreted one way or another. I am referring to the thesis about how prices will rise. And in the summer, as we know, food naturally becomes cheaper, because there are seasons of products, there are seasonal fluctuations in prices, there is inflationary pressure on prices. In recent years, we have seen a technical dispute about some small percentages by which prices are raised when a country adopts the euro. Examples are given in countries like Croatia or wherever they somehow increased, and they did not increase... This only diverts the conversation that we should not be in the euro. We hear how the entry should be postponed by one, two or 10 years. This will not bring any specific advantages to Bulgaria.

- Are we ready to adopt the euro, or is there also a goal for politicians to simply talk about what they have done, what they have achieved?
- Yes, we are ready. We have been in the eurozone for 80% of 1997.

- Because we have a fixed exchange rate?
- Exactly. We have a political commitment and a fixed exchange rate with all its effects that this exchange rate has on the Bulgarian economy. And these effects have long been realized. Now the arguments that some merchant will wake up one morning and decide to raise the price of a cup of coffee for people... This has nothing to do with our readiness or unreadiness for the euro. These are commercial practices. Prices are kept in a kind of balance of two things - competition and control. Any attempt to centrally administer prices is, how should I say, inappropriate. Now the president is talking about some buffers. What is this buffer? Who will administer it? How will it be applied? These are complicated words for ordinary people.

- We are entering the Eurozone, we are adopting the euro and the Currency Board, in which we are currently, is ending. What does this mean...?
- It means that we no longer have a Currency Board, because we will adopt the euro at an exchange rate that is written in the law.

- And then will the European Central Bank determine what the Currency Board has been doing so far, or will we have a “hat“ in the person of the European Bank?
- The European Central Bank has its own policy. The Bulgarian National Bank - as a division of the European Central Bank, will have an obligation to perform tasks that will be solved at the local level. We have had a law for several years now since we have been in the banking union and this thing cannot be felt from the street. People who are professionally involved in finance and economics are not stressed by this. What some people are trying to do now is to say things to not very enlightened people, which is not a disadvantage. It is about numbers, percentages. Yes, not everyone is required to have a financial education and so on. They tell us what happened in Croatia, in Slovakia, in the Baltic republics. These are countries that have an economy that is similar in structure to ours, and, as we can see, they are doing quite well. Even better than if they did not have the euro.

- What will change for people and what for business when we adopt the euro?
- Why are you separating people from business.

- By people, I mean will there be a difference in the purchasing power of a person who works for a salary?
- This whole story with people this way, people that way... We have economically active people. Some are not on a salary, others are. A manager with a six-figure salary in a large company is also on a salary. Is he from the people or not from the people? I can't understand. This work with people is more in the arsenal of populism. We have people who have a certain education and certain responsibilities in the economy. Things have been clear to them for years. We also have some other people - politicians or economists, who are definitely trying to convince us that when the euro comes, our position will worsen. And because they cannot say “we will not join the euro“, they say that we will adopt the euro, but in 10 or 20 years, in I don't know how many years. Nothing in the structure of the Bulgarian economy will change dramatically in the next few years to say that then we will be “more ready“ than now.

- Have we been late so far because we are not in the eurozone?
- We are in the eurozone to a large extent and that doesn't matter at all. Economic growth is not related to the system by which we measure economic success or failure. The fact that we are not in the eurozone definitely affects state finances, the price at which the Bulgarian state finances itself, the reputation of the state, investments and various other things that are very important for the development of the economy and for the people professionally engaged in it.

- If we have to summarize, is it realistic for all of this to happen now?
- Why not realistic…

- Because we don't have the convergence report yet?
- I hope the report is positive, because - if it is not positive, it means a serious failure for Bulgaria. Don't forget that we are in an active phase of the so-called ERM2 procedure and it is good that this procedure ends successfully. Because failure would immediately affect the country's rating, the country's reputation, and the expectations of economically active people in Bulgaria. Moreover, we will not prosper if we compare ourselves with the weakest in the economy. On the contrary - we should strive for the leading countries.