It is important to take advantage of the conditions in place so that the wage moderation begun in the first half of the year may take root in the coming quarters, and so that ailing companies may maintain employment and ensure their survival by drawing on the new avenues of flexibility offered to them, through negotiations with their workers. The austerity measures adopted in the public sector, which include wage cuts, will help bring about the adjustments the private sector needs to entrench its competitiveness. On top of wage restraint in those companies that need it to restore competitiveness, there should be genuine productivity gains based on greater efficiency, since so far their expansionary behaviour chiefly reflects the severity of the employment adjustment. A further key ingredient to ensure gains in structural competitiveness is the continuation of the current low-inflation scenario once the recovery firms. The return of the core inflation rate to its low level before the VAT rise, once the base effects are stripped out in the second half of next year, would be a good indicator that cost- and price-setting processes are moving in the right direction and are capable of surviving comfortably within an area of price stability. The absence of indexation clauses in wage bargaining for 2011, as stipulated in the agreement in force, will help prevent the rise in VAT from exerting second-round and inflation-inertia effects.
At the moment, the only open issue for us is the inflation criterion, but things are not clear-cut regarding it either. On the one hand, inflation is at high rates not only in our country but also in the entire EU. On the other hand, in October for the first time in more than a year the rate of inflation in our country reversed its trajectory of constant growth. We will closely monitor how this process develops, but it must be actively supported by adequate anti-inflationary measures, including by sufficiently disciplined budget. What we are currently focusing on as a central bank in relation to the euro area are two issues: the legal framework and the technical preparation. Regarding the legal framework, we expect the amendments to the BNB Law to be submitted to the National Assembly literally within days, with which to overcome legal non-compliance found in the convergence reports of the ECB. Serious progress has also been made in the preparation of a draft Law on the introduction of the euro within the framework of a working group under the Coordination Council for the preparation of the Republic of Bulgaria for membership in the euro area. Of course, this is just the beginning. I have no doubts that the country has the expertise and capacity to prepare all draft legislation on time and with good quality. What is needed is to have a Government to introduce them and a Parliament to approve them.