At today's meeting of the European Stability Mechanism (ESM), Bulgaria's accession to the mechanism was approved, European Commissioner for Economic Affairs Valdis Dombrovskis announced at a press conference after the Eurogroup meeting. He noted that Bulgaria will introduce the euro from January 1 next year, and the ESM's decision represents another step towards strengthening the resilience of the Bulgarian economy.
ESM Chairman Pierre Gramegna announced that Bulgaria had requested to become part of the mechanism and will have access to “powerful financial protection” from next year.
The ESM is a key element of the financial stability architecture in the Eurozone. It provides financial assistance to member states that are experiencing difficulties or are threatened with difficulties in financing. The mechanism was created with an intergovernmental treaty of February 2, 2012, and its activity began at the end of the same year. Its headquarters is in Luxembourg. The ESM is an intergovernmental organization under international public law, with the Eurozone countries as its shareholders. By issuing debt instruments, the ESM finances loans and other forms of assistance to support the member states.
The European Financial Stability Facility was created in 2010 and was succeeded by the ESM to provide loans under macroeconomic adjustment programs; to buy back debt on the primary and secondary debt market; provides financial protection in the form of credit lines; finances recapitalizations of financial institutions by providing loans to the governments of the countries under the mechanism.
BTA recalls that yesterday the Governor of the Bulgarian National Bank (BNB), Dimitar Radev, stated in a speech during the Annual Dinner of the European Stability Mechanism in Luxembourg that “Bulgaria is currently experiencing political tensions and waves of public pressure. These dynamics are part of democratic life and give rise to an intense public debate. But despite these changes, the strategic orientation towards the euro remains preserved”.