Workers count Bulgarian Lev banknotes at a store in Sofia, Bulgaria on Friday, March 29, 2024.
Oliver Bunic/Bloomberg via Getty Images
Bulgaria on Wednesday secured a green light to join the Eurozone. This means that block could soon grow from 20 to 21 members.
Both the European Commission and the European Central Bank have evaluated the country as meeting the requirements for adopting a single currency starting next year.
“This positive rating of this convergence paves the way Bulgaria introduces the euro and joins the Euro region to become the 21st EU member state as of January 1, 2026,” ECB Executive Committee member Philip Lane said in a press release.
The European Commission described the assessment in a statement as “a critical and historical step in Bulgaria’s journey to adopting the Euro.”
European Commission President Ursula von der Leyen said the decision “means greater investment and trade with partners in the Euro region, as well as stability and prosperity for the Bulgarian people.”
“Bulgaria will also take a fair spot in shaping the Euro area decision,” she added in a social media post.
This shows a shift from last year’s report, and concluded that Sofia did not meet the so-called convergence criteria in order to adopt the currency because the country’s inflation rate is too high.
One of the obstacles to Cross was inflation. Bulgaria’s harmonious consumer price index is comparable to European countries – came in at 2.8% in April, according to Eurostat, the Bureau of Statistics.
Price stability is just one of the requirements that the country must meet to participate in the eurozone. Others include restrictions on the size of the country’s government’s deficit and debt rate, its average nominal long-term interest rate, and exchange rate stability.
There are also legal requirements to cover central bank independence.
Bulgaria joined the European Union in 2007, and also joined the Eurozone at the time, pledging to abandon Bulgaria’s LEV as its official currency. According to the European Union, approximately 341 million people use the euro in a country currently in the 20 euro area. The ECB says 29 billion euros of bank notes are in circulation, with more than 1.5 trillion euros ($1.7 trillion).
One euro is equivalent to 1.96 LEV. This is the rate set when Bulgaria became part of the board of directors that locked its currency.
There are various attitudes about joining the Euro within Bulgaria. A survey released by the EU last year suggested that 49% support becoming part of the Euroblock. Political views are also divided, with several nationalists and the country’s president opposed to it, while Prime Minister Rosen Ziyazkov supports it.
In addition to its assessment, the European Commission also adopted a decision by the Council on Bulgaria’s Euro adoption and a proposal to regulate councils at the beginning of next year. The EU Council has the final say on countries participating in the Eurozone.
