Bulgaria is set to join the eurozone at the beginning of next year, having successfully navigated various economic challenges and received the green light from both the European Central Bank (ECB) and the European Commission on Wednesday.
EU economy chief Valdis Dombrovskis described this milestone as “a historic moment for Bulgaria, the euro area, and the European Union.”
ECB Executive Board Member Philip Lane expressed his congratulations, commending Bulgaria’s commitment to the necessary adjustments.
Since becoming an EU member in 2007, Bulgaria has aimed to transition from its current currency, the lev, to the euro. However, ongoing inflation and political instability have delayed this goal.
Previously, Bulgaria’s entry into the eurozone was postponed due to its inability to manage rising price levels, which surged during the energy crisis in Europe following Russia’s invasion of Ukraine. Fortunately, the annual Consumer Price Index (CPI) eased to 3.5% in April, nearing the EU’s target of 3%.
Both the ECB and the Commission are now satisfied with Bulgaria’s economic stability regarding public debt, fiscal deficit, inflation rates, interest rates, and exchange rates.
Next, Bulgaria’s eurozone membership awaits approval from euro area finance ministers, with a final decision anticipated on July 8.
This significant breakthrough comes in the wake of widespread protests in Bulgaria against adopting the euro. Disinformation campaigns, both domestic and foreign, have fueled fears among certain groups, leading to narratives suggesting that the euro would worsen poverty and increase inflation.
In a recent move, Bulgarian President Rumen Radev stirred controversy by proposing a referendum on the currency switch. This suggestion was quickly dismissed by the pro-European majority in parliament, who accused him of trying to undermine euro adoption on behalf of Moscow.
While countries previously joining the eurozone have experienced mild inflation spikes, membership offers numerous advantages, including lower borrowing costs, attraction of foreign investment, and smoother cross-border trade. Furthermore, being part of the eurozone would afford Bulgaria a greater influence in shaping the ECB’s monetary policy.
Notably, Croatia was the last nation to join the eurozone in 2023.
Photo credit & article inspired by: Euronews
