Tag:

ECB

World

Bulgaria Euro Adoption: Date, Impact & What Changes in 2026

by Lucas Fernandez June 19, 2025

written by Lucas Fernandez

“`html

Bulgaria on Track to Adopt the Euro Currency by 2026

Table of Contents

Bulgaria on Track to Adopt the Euro Currency by 2026

19.06.2025 19:09

(Akt. 19.06.2025 19:09)

Land fulfills criteria
© What/AFP

Luxembourg-European finance ministers have approved Bulgaria’s entry into the Eurozone,setting the stage for the Balkan nation to adopt the euro currency on January 1,2026. this decision follows a favorable assessment from both the European Commission and the European Central Bank (ECB), confirming that Bulgaria has met the necessary economic benchmarks for Eurozone membership.

Key Criteria Met for Euro Adoption

To gain entry into the Eurozone, countries must demonstrate price stability, maintain sound public finances, and exhibit stable exchange rates. These measures ensure the euro’s value and protect consumer purchasing power.

Eurozone candidates are also required to prove their public debt is under control and maintain a stable currency exchange rate to facilitate business planning.

Did You Know? The European union’s debt-to-GDP ratio stood at 81.7% in Q4 2023, highlighting the importance of fiscal obligation for Eurozone hopefuls Eurostat.

Road to Euro Adoption: A Timeline

Bulgaria’s initial target for Euro adoption was early 2024, but it was delayed due to a high inflation rate of 9.5 percent, which did not meet the EU Commission’s price stability criteria.

Despite being one of the EU’s poorer members based on GDP per capita, Bulgaria has shown higher growth rates than many other EU nations. Bulgaria joined the European Union in 2007 and is poised to become the 21st country to adopt the euro. The move has sparked public debate and protests within Bulgaria.

Pro tip: Countries like Croatia have successfully adopted the Euro,demonstrating the potential economic benefits and challenges of integrating into the Eurozone Reuters.

Next Steps for Bulgaria’s eurozone Entry

The next step involves approval from all EU finance ministers,followed by discussions among EU heads of state and government at the end of June. After consulting the European Parliament and the ECB, the member states must formally adopt the necessary legal acts at the finance minister level.

Key Milestones for Bulgaria’s Euro Adoption
Milestone	Date
Initial Euro Adoption Target	early 2024 (Delayed)
Finance Ministers’ Approval	June 2025
EU Heads of State Discussion	End of June 2025
Targeted Euro Adoption Date	January 1, 2026

The Broader Context of Eurozone Expansion

June 19, 2025 0 comments

Business

Yannis Stournaras: If Trump imposes tariffs, Europe will respond – What is he asking from the ECB? –

by Ethan Caldwell November 25, 2024

written by Ethan Caldwell

The governor of the Bank of Greece, Giannis Stournaras, spoke in favor of a 25 basis points reduction in interest rates at the European Central Bank meeting in December.

Yiannis Stournaras also advocated a reduction in interest rates for each ECB meeting until it reaches the neutral rate which is at 2%. He even mentioned that it is too early to talk about whether the ECB should go for a more expansionary monetary policy (ie below the neutral interest rate threshold).

Speaking on Bloomberg TV, Yiannis Stournaras did not rule out the possibility of a mild recession in the event of the imposition of tariffs by the Donald Trump administration, if he follows through on his pre-election announcements and went on to say that Europe will have no choice but to make a similar move .

He warned that there should be no barriers to trade and said the ECB was afraid of stock market volatility. He emphasized that there is also concern about the public debt part and added that the ECB remains data dependent, that is, it mainly bases itself on what the data say.

Regarding the increase in negotiated wages, Yiannis Stournaras stated that the figures for the third quarter that showed an increase were a deviation.

Regarding the issue of Central Bank independence and some comments heard from the Trump camp about the current head of the Fed, Jerome Powell, the Greek central banker said that Powell is an excellent central banker and considered this issue more important than the customs duties.

Although, as he estimated, the new presidency in the US will not make any changes to the FED’s statute, he commented that if it did so, it would have significant global consequences and would affect the global markets, primarily those of bonds.

Source: ot.gr

#Yannis #Stournaras #Trump #imposes #tariffs #Europe #respond #ECB

Here are two PAA related ‍questions ⁤for the provided text:

## World Today⁤ News: In-Depth Discussion‍ on ECB Interest Rates, Tariffs, ⁤and Global ‍Economic⁢ Outlook

**Host:** Welcome to World Today News! Today, we delve into the complex landscape of global economic trends with two esteemed guests: [Guest 1 Name & Expertise] and [Guest 2 Name & Expertise]. We’ll be discussing recent comments by the ‌Governor of the Bank of Greece, Giannis Stournaras, regarding ECB ⁤interest rate policy, the‌ potential impact of US tariffs,‌ and the role of central banking independence.

**Section I: ECB Interest Rates and Economic Outlook**

**Host:** Governor Stournaras advocates for a 25 basis point interest ‌rate reduction at the upcoming ECB meeting and⁢ further gradual decreases until reaching⁢ a neutral rate of 2%.

**Guest 1:** Do you‌ agree with Governor Stournaras’ stance on interest rates? What factors⁣ do you think the ECB should consider when⁣ making this decision?

**Guest 2:** ⁣Beyond the immediate impact of rate changes, what are the potential long-term consequences for ‌the Eurozone economy if interest rates are lowered significantly?

**Host:** Governor Stournaras mentions that the ECB is “data dependent.”

**Guest 1:** What specific data points are most crucial for the ECB in ⁢formulating monetary policy, and how do current economic indicators ⁤align‍ with those data‍ dependencies?

**Guest 2:** How can the ECB balance the‌ needs of different Eurozone ‌member states‍ with varying economic conditions when implementing monetary policies?

**Section II: Potential Impact of US ‍Tariffs**

**Host:** Governor Stournaras raises concerns about ⁢the possibility of US tariffs and‌ the potential for⁢ retaliatory measures by Europe

**Guest 1:** What⁤ specific ‌sectors and economies within the Eurozone are most⁣ vulnerable to ‍the impact of potential US tariffs?

**Guest 2:** Do you believe that retaliatory tariffs from Europe ⁣would be an effective response to US trade protectionism? What are the potential consequences, both positive and negative, ⁤of such a move?

**Host:** Governor Stournaras emphasizes the importance of free trade. What are the broader implications for global economic growth and stability ‍if trade barriers increase significantly?

**Guest 1:**‌ How can international organizations like the WTO play a role in mitigating trade‌ tensions and promoting open markets?

**Guest 2:** What are some⁢ alternative strategies⁣ that countries can pursue to address concerns regarding trade imbalances or ⁣unfair trade practices without resorting to tariffs?

**Section III: Central Bank Independence and⁣ Global Financial Markets**

**Host:** Governor Stournaras asserts that ⁣Jerome Powell is ⁣an⁣ “excellent central banker” ⁣and stresses‍ the importance of ⁤central⁤ bank⁤ independence.

**Guest ⁣1:** How crucial is central bank independence for maintaining stable financial markets and achieving long-term economic goals?

**Guest 2:** Recent⁣ political⁤ rhetoric has raised concerns about potential interference in the operations of central banks. What safeguards are in place to ensure the integrity and independence of institutions ⁢like‍ the Fed and the ECB?

‌**Host:** Governor Stournaras warns about the potential ⁢global ‌consequences if the statute of the ⁣Federal Reserve were to be altered.

**Guest 1:** What are the⁢ potentially destabilizing effects of undermining the independence of‌ powerful central banks on‍ global financial markets?

⁣ **Guest 2:** How can global policymakers work together to uphold the principles of central bank independence ⁢and ⁤promote a stable and predictable international⁤ financial system?

**Conclusion:**

**Host:** Thank you to our esteemed guests for joining us today and providing valuable insights into these critical issues facing the global economy. This has ‌been an informative discussion on the intricate web of relations‌ between ECB policy, trade tensions, and the role ‍of central banks within the international financial landscape. We ⁤encourage our viewers ⁢to continue engaging with these important topics.

November 25, 2024 0 comments

Business

G. Stournaras: At 3% the key interest rate of the ECB at the end of 2024 –

by Ethan Caldwell October 13, 2024

written by Ethan Caldwell

The governor of the Bank of Greece, Giannis Stournaras, foresees two more equal reductions in interest rates, by 0.25% each, by the European Central Bank (ECB) within 2024.

As he says in an interview published today in the Financial Times, “Even if we have a 25 basis point cut now and another in December, interest rates will go back to just 3%, from 3.5% today, remaining very limiting levels”.

The 68-year-old central banker added that there would, perhaps, be a strong case for a further easing of monetary policy in 2025.

It is recalled that the ECB will meet next week in Slovenia, where the issue of interest rate cuts is expected to be raised. The next crucial meeting of its Board of Directors for the future of interest rates will be that of December shortly before the expiration of 2024.

Mr. Stournaras pointed out that “confidence indicators remain very subdued and inflation is falling faster than macroeconomic projections predicted [της ΕΚΤ] of September” and added: “The latest figures show that we will probably reach the 2% target in the first quarter of 2025.”

In September, inflation in the euro area fell to 1.8% ‒ below the ECB’s target for the first time since 2021.

However, consumer prices are expected to rise faster in the final months of the year as base effects from energy prices cease to be incorporated into annual rates of change.

The ECB’s target is an inflation rate of 2% in the medium term, but at the same time, strong wage growth and high service inflation continue to cause concern.

The ECB began easing its restrictive monetary policy in June and proceeded to cut interest rates again in September. If it also cuts the policy rate below 3.5% in October, it will mean that it is abandoning its previous practice of cutting interest rates by 25 basis points every other meeting.

As the Governor of the Bank of Greece argues, the medium-term trend of inflation suggests that there is scope for a faster reduction in interest rates.

“If inflation continues its downward path towards the 2% target, why not cut interest rates at every meeting?” said Mr. Stournaras.

According to Mr. Stournaras, there are few members of the Board of Directors who have a completely opposite opinion on the ECB’s upcoming monetary policy moves.

“We all have the same figures at our disposal, and they show that we are on track to achieve the 2% target [για τον πληθωρισμό] in mid-2025, if not earlier” he said characteristically adding that, “if we do not act, there is a risk of causing a blow to the economy and driving inflation below the target”. This would mean a return to the “old problem” of very low inflation. “Nobody wants that.”

#Stournaras #key #interest #rate #ECB

October 13, 2024 0 comments

Business

Is a loan worth it now?

by Ethan Caldwell October 8, 2024

written by Ethan Caldwell

After the ECB’s latest key interest rate cut, interest rates on installment loans have fallen to their lowest level since April 2023. Is a loan worth it now?

After the key interest rate cut by the European Central Bank (ECB), the interest rates on installment loans are also falling. While interest rates in the first half of September were around the same level as the previous month at 6.82 percent, they then fell to 6.67 percent. This is the lowest level in around a year and a half. This is shown by a current analysis by the comparison portal Verivox.

Consumers with average creditworthiness were able to take out installment loans from Verivox at an interest rate of 6.67 percent in the second half of September. According to the analysis, this is the lowest value since April 2023. In the first half of the month, the interest rate was 6.82 percent, similar to 6.86 percent in August.

“In a long-term comparison, we are still in a high-interest phase,” says financial expert and Verivox boss Oliver Maier. “The first key interest rate cut in the summer had already brought short-term relief. After that, interest rates settled back down to their previous level in the range between 6.8 and 6.9 percent.”

The European Central Bank’s (ECB) recent decision in September has raised hopes that interest rates could fall sustainably. Specifically, the deposit interest rate relevant to savings interest was reduced by 0.25 percentage points. The main refinancing rate, at which banks can borrow money from the central bank, moved closer to the deposit rate and fell by 0.6 percent – the second largest rate cut since the monetary union was founded.

“Due to a lack of experience, it is difficult to predict what consequences the new adjustment of the key interest rates will have for borrowers,” says Maier. “But if credit institutions can obtain money from the central bank at lower interest rates, they gain scope to offer their customers more favorable conditions when granting installment loans.”

When consumers plan larger purchases or investments and want to finance them with a loan, the question arises as to when is the right time. According to Maier, it is not a sensible option to continue to delay taking out a loan.

Interest rates are only likely to fall gradually and therefore rather slowly. If you follow a few important savings tips when taking out a loan, you can reduce your financing costs more effectively than if you wait for interest rates to fall, says Maier.

According to current figures from the Bundesbank, installment borrowers currently pay a nationwide average of 8.33 percent interest. If you carefully compare the loan offers from different providers, you can save up to 1,000 euros in interest on an installment loan of 20,000 euros with a term of six years.

Methodology: All loan agreements with Verivox were included in the evaluation. The median interest rate is evaluated because it is representative of borrowers with average creditworthiness. Half of all customers received their loan at this interest rate or cheaper, the other half pay higher interest rates. The evaluation period for the first half of September extended from September 1st to 14th; for the second half of the month, the period from September 15th to 27th inclusive was evaluated.

October 8, 2024 0 comments

Business

Lagarde: ECB not negotiating 2% inflation target – 2024-09-26 01:59:13

by Ethan Caldwell September 26, 2024

written by Ethan Caldwell

“The European Central Bank needs to think carefully about how to deal with risks and uncertainty in an era of more volatile inflation and less clarity about the impact of monetary policy,” ECB President Christine Lagarde said.

“We will have to think about how our policy framework integrates risk assessments,” she said in a speech at the International Monetary Fund in Washington on Friday, referring to the ECB’s ongoing policy review.

Lagarde pointed out that the pandemic, the war in Ukraine and the energy crisis “have changed the structure of the economy and are challenging the way we assess the impact of monetary policy.” More supply-side shocks are widely expected in the future.

Lagarde also focused on the effects of global fragmentation and digitization on monetary transmission, although she assured that the ECB’s review would not discuss the 2% inflation target

The ECB wants to present the results of the review, which follows the one completed in 2021, in the second half of 2025. Although this time it will be less broad and the symmetric 2% inflation target is not up for discussion, it will however, it could have significant effects.

Executive Board member Isabel Schnabel said in April that the ECB should consider revising how it forecasts economic expansion and inflation to improve communication and respond quickly to shocks, warning that it could be dangerous to rely on a policy of publishing only basic forecasts.

#Lagarde #ECB #negotiating #inflation #target

September 26, 2024 0 comments

Business

Interest rates: The FED opens the way for the ECB to cut again in October – 2024-09-25 18:39:29

by Ethan Caldwell September 25, 2024

written by Ethan Caldwell

A new rate cut for the euro is expected to be considered by the ECB in October following the FED which cut its interest rates by half a point last Wednesday. The announcements of J. Powell pave the way for the ECB to proceed with a second cut in euro interest rates by 0.25 basis points, authoritative European sources with knowledge of the data will consider at the next meeting of the Central Bank in Frankfurt, note.

The data

The data is as follows:

First, the extent of the cut announced in US interest rates, along with predictions that the FED will continue on the same line (albeit with smaller rates of reduction) in order to avoid a recession in the US economy. Although J. Powell explained that the pace of dollar interest rate cuts in the coming period will not be the same, markets have every reason to expect that the FED will have cut interest rates by another 0.75 basis points by the end of the year.

Secondly, the positive developments on the inflation front in the eurozone which is following, albeit modestly, a steady downward trend. At the same time, as can be seen from the data, the European economy shows recovery tendencies from the stagnation of the previous year. “The ECB, with its interest rate hikes in previous years, succeeded in reducing inflation without causing a recession in the eurozone,” the same European sources characteristically point out, discounting further interest rate cuts in the coming months.

Third, the need to prevent a dramatic devaluation of the euro against the dollar, which would hurt the competitiveness of European products at a time when Europe is trying to accelerate its growth pace. It is worth noting that the European GDP depends on international trade at a rate of more than 50%. This percentage in the USA is 27%, while that of China moves at a similar level. At a time when eurozone countries are under unprecedented pressure from the onslaught of cheaper Chinese products, an appreciation of the euro would be a major negative development.

Based on these data, authoritative observers predict that the ECB will continue in the coming months, albeit at a moderate pace, to reduce euro interest rates, taking into account developments on the inflation front. What is certain, however, is that the current interest rate cycle is not going to drive the cost of money to pre-pandemic levels. The geopolitical turmoil brought about by Russia’s invasion of Ukraine, the unknown duration of this war, as well as the conflict in the Middle East, portends continued economic turmoil, so monetary authorities will remain very cautious in their moves going forward.

Source: APE – MEB

#Interest #rates #FED #opens #ECB #cut #October

September 25, 2024 0 comments

Newer Posts

Older Posts