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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On Twitter, it’s always possible – if you’re obsessed enough to keep a close eye, or are at least blessed with serendipity – to pick up the occasional golden nugget that passes everyone else by. Like this one, for example:

Viviane Reding is one of the EU Commission’s Vice Persidents, but her specific remit is Justice, Fundamental Rights and Citizenship. It would therefore appear that she is doing a bit of freelancing beyond that portfolio, not that that phenomenon is unknown among EU Commissioners.

What’s remarkable here instead is her message, as appeared a few days ago in the relatively obscure business paper Deutsche Mittelstands Nachrichten (or “News for German Medium-Sized Firms”). Are you worried about poor people from elsewhere in the EU (read: Romania and Bulgaria) coming to your countries to “steal” jobs and freeload on your social welfare provisions? Reding asks. Well, the real problem here, she says, is those “generous welfare systems” themselves: cut them back, she says, and problem solved! Moreover, the problem would be solved by the member-states doing what they should do – i.e. cutting back – and not by the EU, whose problem it isn’t anyway.

Now, this is something new. Indeed – although Ms. Reding would undoubtedly deny any connection – it’s something that philosophically is straight out of the contemporary American Republican Party, whose partisans in Congress have done rather well lately to reduce food stamps (i.e. food assistance) and cut off extended unemployment benefits for US citizens. But, back in our European context, those Western European social welfare edifices, built up over the decades since the Second World War, are usually immune to criticism – at least from those outside the national borders. (more…)

Now that the warm weather is upon us (at least in much of the Northern Hemisphere; actually, consistent with the name of this blog, I’m mostly talking about Europe), are you on the lookout for the latest “in” beach partying-spot? Stern, the German newsmagazine which has always chosen a rather more risqué tack than its more establishment competitor Der Spiegel, has your answer.

It’s about Bulgaria, specifically a seven-kilometer stretch of coastline on the Black Sea, south of the coastal city Burgas, that’s apparently quite the rage. At least until you look at the name of the article’s author, Milena Mileva*, and realize that the piece – entitled Heading home on all fours – was likely written in Bulgaria and pressed onto the popular magazine’s pages through some sort of non-disclosed commercial arrangement.

That sort of thing wouldn’t raise an eyebrow in Bulgaria – though you’d think it would in Germany – but beyond the endemic corruption the place clearly has much else to offer the vacationer: beaches of pure white sand and clear water, sunny days, picturesque mountains in the background, and cheap, cheap prices (e.g. €1.20 for a large beer). This has been true for decades, nay centuries, and in Communist times many East Bloc comrades, especially from the DDR, would regularly troop down in their Trabants to this bit of coast for much the same reason. (more…)