The Bank Union Will Cost Hundreds of Millions of Euros to Bulgaria
Sofia, Bulgaria -
Bulgaria has to pay in hundreds of millions of euros if it wants to join the EU's banking union within a year, it is clear from the regulations and directives of the Single Restructuring Facility and its fund.
In addition, the banking system has to go through a new large-scale asset review similar to that of 2016, eurozone and social dialogue Commissioner Valdis Dombrovskis said.
At the beginning of the year, Finance Minister Vladislav Goranov said that Bulgaria will submit an application for joining the ERMII waiting room until 30 June 2018. In April, it became clear that the European Central Bank (ECB) and the European Commission are setting new informal condition to allow Bulgaria to join ERM II - joining the Banking Union, membership in the Eurozone is mandatory, but voluntarily - for those outside the euro area.
Membership in the banking union requires considerable preparation.
It is necessary to conduct a new large-scale verification of the assets of the banking system. In addition, Bulgaria has to import hundreds of millions into the newly created Single Fund for Restructuring. Most likely, it will transfer some of the national restructuring fund, which by 2018 has more than BGN 400 million.
Once transferred to the European fund, the funds collected from the Bulgarian banks will be able to be used to rescue other vaults in the banking union. In bankruptcy, Bulgarian banks will also be able to receive money from the fund. The decisions will, however, be taken by the ECB and the Single Restructuring Board, and Bulgaria will not participate fully in the decision-making process.
"Banking union means that the largest banks in the country fall under the direct supervision of the European Central Bank's Single Supervisory Mechanism. Bulgaria is bound by the general framework of the banking union, which means uniform supervision, and in case of problems in some of the banks - by a unified mechanism for solving them," said commissioner Valdis Dombrovskis.