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Action plan for joining ERM II and the banking union drafted by the government

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Action plan for joining ERM II and the banking union drafted by the government

The government on Wednesday approved an action plan comprising procedures in relation to the country's bid to join the eurozone's so-called 'waiting room' – the Exchange Rate Mechanism II (ERM II), and the EU banking union by July 2019.

The steps are aimed at strengthening the regulatory framework on banking supervision, improving the macroprudential framework on credit borrowers, strengthening supervision of the non-banking financial sector (pension funds and insurers) and improving the insolvency framework, the government said in a statement following its weekly meeting.

New legislation on banking supervision and measures allowing the establishment of common requirements for credit borrowers is expected to be adopted by parliament by the end of 2018, the government noted. Other measures include fight against money laundering and improving the legislative framework governing the management of state-owned enterprises. The implementation of the above-mentioned measures will make sure that the country sticks to its commitments, the government concluded.

Earlier this month, the European Commission said it has approved Bulgaria's additional requests for technical support through the Structural Reform Support Programme (SRSP) for projects aimed at preparing the country's smooth transition to the ERM II, including reforms in the area of insolvency, with accompanying measures to reinforce the judicial infrastructure and the corporate governance of state-owned Enterprises.

Last month, the euro area finance ministers said they would support Bulgaria's intention to join the ERM II after a positive assessment of European Central Bank but urged the country to adhere to its promises for reforms under the Cooperation and Verification Mechanism (CVM). "We call on the Bulgarian authorities to thoroughly implement the reforms monitored by the Commission under the Cooperation and Verification Mechanism in the areas of judicial reform and the fight against corruption and organised crime in Bulgaria, in light of their importance for the stability and integrity of the financial system," the finance ministers of the euro area said.

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