The euro zone is prepared for a brand new member: Bulgaria

Bulgaria on Wednesday secured the inexperienced gentle to hitch the euro zone, that means the bloc might quickly develop from 20 to 21 members.

The European Fee and European Central Financial institution each assessed that the nation met the necessities to undertake the one forex beginning subsequent yr.

“This constructive evaluation of convergence paves the way in which for Bulgaria to introduce the euro as of 1 January 2026 and grow to be the twenty first EU Member State to hitch the euro space,” Philip Lane, member of the ECB Government Board, stated in a press launch.

The European Fee described the evaluation as “a vital and historic step on Bulgaria’s journey in the direction of euro adoption” in an announcement.

European Fee President Ursula von der Leyen congratulated the nation, saying the choice “will imply extra funding and commerce with euro space companions, and extra stability and prosperity for the Bulgarian folks.”

“Bulgaria will even take its rightful place in shaping euro space choices,” she added in a social media publish.

This marks a shift from final yr’s reports, which concluded that Sofia didn’t meet the so-called convergence standards to undertake the forex on the grounds that the nation’s inflation charge was too excessive.

One of many obstacles to cross was inflation. Bulgaria’s harmonized client value index — which is comparable throughout European international locations — got here in at 2.8% in April in accordance with statistics company Eurostat.

Value stability is simply one of many necessities a rustic must fulfil so as to be part of the euro zone, and thereby the European Central Financial institution. Others embody limitations on the scale of a nation’s authorities deficit and debt ratio, its common nominal long-term rate of interest and its alternate charge stability.

There’s additionally a authorized requirement that covers central financial institution independence.

Bulgaria joined the European Union in 2007 and dedicated on the time to additionally be part of the euro zone and relinquish the Bulgarian lev as its official forex. Round 341 million folks use the euro throughout the present 20 euro zone international locations, in accordance with the European Union. The ECB says over 29 billion euro financial institution notes with a price of greater than 1.5 trillion euros ($1.7 trillion) are in circulation.

One euro is equal to 1.96 lev, a charge set when Bulgaria grew to become a part of the board which anchors the currencies.

There are combined attitudes about becoming a member of the euro inside Bulgaria. A survey printed final yr by the EU recommended 49% of the public was in favor of the turning into a part of the euro bloc. Political opinion can also be cut up, with a number of nationalist events and the nation’s president advocating towards it, whereas Prime Minister Rosen Zhelyazkov is supportive.

The European Fee stated that alongside its evaluation, it had additionally adopted proposals for a council determination and council regulation on Bulgaria’s euro adoption initially of subsequent yr. The council of the EU has the ultimate say on international locations becoming a member of the euro zone.