The most problematic Maastricht criterion that blocks Bulgaria’s entry into the Eurozone is price stability, or in other words – inflationmeasured according to the Harmonized Index of Consumer Prices (HICP).
The Eurostat data, which are the only authoritative ones in the calculation of the inflation criterion, show that for several months in a row our country has made serious progress in reducing the annual HIPC inflation. In December 2023, it was 5%, a month later – 3.9%, at the end of February 2024 – 3.5%, and in March 2024 – 3.1% on an annual basis.
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From the indicated levels, it can be seen that our country has visible successes in its efforts to achieve price stability. In this case, the population’s perception of an increase in the cost of living is irrelevant to the assessment of whether we fulfill this Maastricht criterion or not. Only the numbers from Eurostat’s unbiased statistics matter. And they show that regardless of the falling inflation levels in our country, Bulgaria is still far from achieving the Maastricht criterion for price stability. The reason is in the way it is calculated. According to the treaty establishing the European Union (EU), the level of price stability, which must not exceed one country – a candidate for the Eurozone, is formed as an arithmetic average of the levels of the three countries with the lowest inflation in the EU and 1.5 percentage points are added . For December 2023, this average arithmetic level is 0.47%, for January 2024 – 0.97%, for February 0.67%, and for March 2024 – 0.6% per year. As a result, the levels that annual inflation in Bulgaria should not exceed were 1.97% for December 2023, 2.47% for January 2024, 2.17% for February and 2.1% for March. The comparison of real and permissible inflation shows that the negative difference for our country is still significant, although it is shrinking.
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It is clear that, in order to have a real chance to meet the Maasticht criterion this year, it is necessary to make efforts so that annual HIPC inflation in our country falls below 2.5% per annum and be pushed to slowly but surely reach a level of 2% per annum. However, this can only be done by shrinking budget expenditures and stopping any additional payments from the treasury in the direction of temporary or permanent increases in income.
