August has now started, and this is the month Brussels notoriously empties out (together with Paris, etc.), you can’t find anyone who can actually make a decision, and so nothing can get done. But when they come back in September EU officials will face a full plate, topped by Brexit but also refugee policy (the incoming hordes have now notably shifted to Spain), Poland/Hungary, Trump, and all sorts of other things. None of those is a particularly pleasant subject, so the EU mandarins will surely cherish all the more any good news on their agenda – like Bulgaria know knocking on the door of that EU club-within-EU club, the Eurozone, as Martin Ehl recently reported for the Czech business newspaper Hospodářské noviny.

This is nothing particularly new. Rather, we’re just past an important milestone for this effort by Sofia (no, not any female but rather Bulgaria’s capital), which namely happened in June when the Bulgarian government struck agreement with Eurozone officials on a program of six economic/financial requirements the country will have to meet by June of 2019 to then be admitted into the so-called European Exchange Rate Mechanism II (ERM II), a monetary arrangement allowing a divergence of only ±15% around a set central rate. It is standard that any given national currency be subject for at least two years to ERM II before that country is allowed to adopt the euro.

Membership Requirements: No Sweat!

For Bulgaria, upholding that ±15% should be no problem, as the Central Bank has long had its currency, the lev, “shadow” (i.e. stay close to) the euro around a fixed point (and before that, the lev “shadowed” the deutsche Mark). When it comes to the three fundamental criteria for euro membership, as well, Bulgaria meets them all with room to spare:

• Inflation: 1.4% in 2017 (1.9% max allowed)
• Government budget deficit: Actually had a surplus last year of 0.9% GDP (max allowed deficit is 3%);
• Overall government debt: Now 29% of GDP (max allowed 60%)

It is hardly unknown for central bank authorities to have their national currency “shadow” a dominant neighboring currency, even though such a policy effectively means giving up control of national monetary policy to that “shadowed” money: the Netherlands authorities long had the guilder shadow the deutsche Mark, while Denmark still today does the same for its krone with regard to the euro (it’s the only other country currently within ERM II).

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Throughout this past month NATO has been busy with its “Atlantic Resolve” set of military exercises in Poland and the Baltic states. These are something new, not occurring previously to the first such training deployments there starting last Spring, and, as is evident by the very name, are designed to bolster local morale in those lands against the increasing military misbehavior of Russian President Vladimir Putin. In fact, military exercises under the same name, also involving American troops (that’s sort of the point), are now getting started in Romania and Bulgaria, and supposedly will include Georgia in May, with US troops set to cross the Black Sea by ferry!

But there is also something else rather new about that Baltic “Atlantic Resolve” as well, now that it’s time for the US troops who trained there to head back to base.

“American convoy stopped in Krakow and Warsaw.” This is truly remarkable, for American troops stationed in Europe generally return to their bases by train – and then usually in the middle of the night, since such transports have lowest priority on any local rail network. Still, and especially for the heavy equipment, that remains the best way to transport these units over long distances.

All that is thrown out the window for “Operation Dragoon Ride,” however, whereby 120 military vehicles and the US soldiers that serve them – from their unit markings it seems they are of the 2nd Armored Cavalry Regiment – are currently making their 1,800 km way back from the Baltics to their base at Vilseck (Bavaria), Germany along the local highways and byways. This article in České noviny discusses how they are currently traversing Poland with, as mentioned, planned stops in Krakow and in Warsaw. In fact, in the latter city (Poland’s capital, of course) they visited the Museum of the Warsaw Uprising. And that’s not all their itinerary in Poland: these troops also met up with the inhabitants of the town Drawsko Pomorskie, which only has 11,878 residents in the first place and is way up in northwest Poland, near the Baltic coast – but, you see, the town also is host to a major firing-range and NATO maneuver area just to its South. (more…)