PRESS RELEASE
Communique on Bulgaria
10 July 2020
At the request of the Bulgarian authorities, the finance ministers of the euro area Member States of the
European Union, the President of the European Central Bank, and the finance ministers and central bank
governors of Denmark and Bulgaria have decided, by mutual agreement, to include the Bulgarian lev in
the Exchange Rate Mechanism (ERM II). The Commission has been involved and the Economic and
Financial Committee has been consulted.
The central rate of the Bulgarian lev is set at 1 euro = 1.95583 leva.
The standard fluctuation band of plus or minus 15 percent will be observed around the central rate of
the lev.
At the same time, following a careful assessment of the appropriateness and sustainability of Bulgaria’s
currency board, it was accepted that Bulgaria is joining the exchange rate mechanism with its existing
currency board arrangement in place, as a unilateral commitment, thus placing no additional obligations on
the ECB.
The agreement on participation of the lev in ERM II is based, inter alia, on the commitment by Bulgaria to
join the Banking Union and ERM II simultaneously and the completion by the Bulgarian authorities of a set
of measures, described in their letter of intent dated 29 June 2018, that are highly relevant for a smooth
transition to, and participation in ERM II. These measures pertain to the following six policy areas: banking
supervision, the macroprudential framework, the supervision of the non-banking financial sector, the anti-
money laundering framework, the insolvency framework, and the governance of state-owned enterprises.
The ERM II parties welcome the positive assessment of the implementation of these commitments by the
European Central Bank and the European Commission. The European Central Bank has today also
announced the establishment of close cooperation with Бъ
(Bulgarian National
[1]
Bank).
The agreement on participation of the Bulgarian lev in ERM II is furthermore accompanied by a firm
commitment by the Bulgarian authorities to pursue sound economic policies with the aim of preserving
economic and financial stability and achieving a high degree of sustainable economic convergence. The
Bulgarian authorities have committed to implement specific policy measures on the non-banking financial
sector, state-owned enterprises, the insolvency framework, and the anti-money laundering framework.
Bulgaria will also continue implementing the extensive reforms carried out in the judiciary and in the fight
against corruption and organized crime in Bulgaria, in light of their importance for the stability and the
integrity of the financial system.
The authorities, together with the responsible European Union bodies, will closely monitor macroeconomic
policy developments and the implementation of these policy measures, in the appropriate frameworks.
The compulsory intervention points in the exchange rate mechanism will be communicated by the ECB
and Бъ
(Bulgarian National Bank), in time for the opening of foreign exchange
markets on 13 July.
For media queries, please contact
Peter Ehrlich,
tel.: +491721316227.
Annex
Application letter from the Bulgarian authorities - including the annex with the post-entry commitments to be
taken at the time of ERM II entry
[1]
ECB establishes close cooperation with Bulgaria’s central bank