Editor's Note: This installment is the third of a three-part series that delves into the issues facing the eurozone and the European Union. This segment discusses the positions of Hungary, Romania and Bulgaria. Click to read part 1 and part 2.
Hungary
Relations with Europe
Like most Central European countries that were part of the Soviet bloc, Hungary orients its foreign policy toward Western Europe and the United States. For example, Hungary joined NATO in 1999 and the European Union in 2004. But at the tactical level, Hungary has sought greater independence than most of its neighbors.
As long as the Hungarian government does not commit political or economic excesses, Hungary is not a priority for the European Union. Although the Hungarian economy is feeling the effects of the European crisis, Brussels will only show increased interest in Budapest if it feels that the interests of Western European banks and companies operating in Hungary are at risk.
Eurozone Accession and View of Integration
Hungary has been planning to join the eurozone since before joining the European Union in 2004. However, as of 2012, there is no target date and the forint (Hungary’s currency) is not part of the European Exchange Rate Mechanism.
Romania
Relations with Europe
Romania sees itself as directly linked to Western Europe. For historical and cultural reasons (Romania has a largely Latin population in the midst of Slavic nations) and because of its proximity to Russia, Romania has directed its foreign policy toward Western Europe and the United States, especially after the Cold War.
With the eurozone crisis still unraveling, Romania is not a priority for the European Union. In the short term, the union's main objective regarding Romania is for the country to remain as stable as possible. Issues that are crucial for Romania, such as Schengen Zone membership and the adoption of the euro, are not currently a priority for Brussels. The last report on Romania by the European Commission, issued in 2011, said Romania has yet to comply with some of the criteria needed to join the eurozone.
The European Union's priorities and Romania's priorities contradict each other. While Romania is very interested in joining the "core" of the European Union, Brussels is in no hurry to integrate Romania. This situation cannot continue indefinitely, and eventually the European Union will have to show more interest in Romania if it wants to prevent Bucharest from reassessing its priorities.
Eurozone Accession and View of Integration
Romania joined the European Union in 2007. During the accession negotiations, Bucharest said it would join the eurozone by 2015. Despite the eurozone crisis, on Sept. 6 Romanian President Traian Basescu affirmed that Romania is still interested in joining the euro by 2015.
Bucharest has supported two core European projects that were designed mainly for eurozone countries: the fiscal compact treaty and the banking union. Even if these projects did not need Bucharest's support, Romania wanted to support them as a way of showing its commitment to the European plan.
Domestic Political Situation
Romania's population is largely pro-European, and support for integration with Europe remains strong even though some of the main benefits of EU membership (especially the accession to the Schengen Zone) have not yet materialized. Romania is currently experiencing a deep political crisis that has undermined its foreign policy goals, including Schengen accession. This crisis could abate after the December elections.
Bulgaria
Relations with Europe
Bulgaria is an enthusiastic supporter of the West, though less so than the Baltic states or Poland. Bulgaria also has strong economic relationships with Russia and Turkey, and the European Union is seen as the best option for Bulgaria, although with limits: Citing deteriorating economic conditions in the eurozone, Bulgaria announced Sept. 3 that it was freezing plans to adopt the euro.
Eurozone Accession and View of Integration
Bulgarian Prime Minister Boyko Borisov and Finance Minister Simeon Djankov said Bulgaria's reversal on the eurozone was the result of the debt crisis and the double dip recession facing the monetary bloc, along with rising public opposition to joining the single currency. Djankov said he only saw costs, not benefits, of entering the eurozone, and that the disagreement among countries on how to best resolve the debt crisis made the prospect of eurozone membership too risky, with rules that could change in a year or two. Bulgaria has broadly maintained an austere fiscal policy over recent years. But the country is not part of the European Exchange Rate Mechanism, despite its fixed exchange rate with the euro. Bulgaria could join the eurozone only once its currency has been fixed to the euro for two years through this system.
Bulgaria's accession to a future banking union and a common tax policy for all EU member states would not be in the country's best interest, according to Bulgarian Central Bank governor Ivan Iskrov. However, Djankov has said that Bulgaria approves of proposals to create an EU monitoring body for the union's banking sector. Djankov also said the EU banking union should cover not only eurozone countries but EU member states outside of the monetary bloc, such as Bulgaria. Djankov qualified his statements, however, saying that too many details about the banking union are too vague or controversial at this point. Djankov also said that in December, his country will host a meeting of the 10 non-eurozone EU finance ministers to discuss the banking union.
Domestic Political Situation
The Bulgarian government is broadly stable, though not unified on eurozone membership. Among the population, 45 percent of respondents to a recent survey approved of the country's decision to not join the eurozone.
