Bulgaria on track to win EU approval to join the euro in 2026

Straits Times

23-05-2025

Bulgaria would be the second country to adopt the euro in the past decade. PHOTO: REUTERS
Bulgaria on track to win EU approval to join the euro in 2026
Bulgaria is close to clearing a major hurdle toward euro adoption, putting the Black Sea nation on course to join the currency area i n 2026 .
The minority government of Prime Minister Rosen Zhelyazkov is awaiting an assessment of its readiness on June 4, when the European Commission and the European Central Bank (ECB) release their convergence reports.
Based on the latest forecasts from the European Union's executive, Brussels is increasingly confident that Bulgaria will meet the criteria for fiscal prudence and currency stability, according to EU officials familiar with the matter. A positive assessment may open the path for adopting the euro from the beginning of 2026.
The decision has not been finalised and could still change, but officials are optimistic the assessment will be a positive one, especially given Bulgaria's recent progress on inflation.
Once that happens, EU leaders would give their blessing at a summit in June, people familiar with the matter said. The final conversion rate between the lev and the euro would be set by the bloc's Finance Ministers – something that could happen as early as July.
A European Commission spokesperson told Bloomberg that the executive arm is now concluding its assessment of Bulgaria's convergence criteria in coordination with the ECB, and intends to adopt its convergence report in early June.
They did not comment on possible results of that assessment. A spokesperson for the ECB declined to comment.
Adopting the euro would be a rare victory for Bulgaria's government, whose predecessors have all argued that joining the single European currency will help the bloc's poorest country close the gap with richer member states.
But their efforts had faced resistance from euro-area leaders, who were skeptical of approving new members after Greece's sovereign debt crisis and a series of money-laundering scandals in the Baltics.
Still, governments and businesses have argued euro adoption will help Bulgaria get closer to the EU's inner circle of decision makers as the bloc seeks to demonstrate unity at a time of geopolitical turbulence.
It would also lower transaction costs and may help attract foreign investment, which for years has been suffering due to political instability and the country's rule of law troubles – Transparency International ranks it as one of the EU's most corrupt.
Bulgaria would be the second country to adopt the euro in the past decade and one of only a handful to do so since the start of the debt turmoil that nearly caused the currency zone to implode. The last economy to join was Croatia in 2023.
Other EU nations have been less eager to join, opting instead to retain their independent monetary policy and the greater latitude that offers in managing a crisis.
With the lev pegged to the euro for more than quarter of a century under a currency board agreement – a tool the country used to escape a hyperinflation crisis in the late 1990s – Bulgaria does not have an active monetary policy, and the switch is unlikely to have major implications.
With a history of narrow deficits and one of the EU's lowest debt-to-GDP levels, Bulgaria has for years fulfilled most formal criteria, and has now managed to bring inflation within the target limits after Russia's full-scale invasion of Ukraine triggered a spike in prices.
While the majority of political parties in Parliament back the euro adoption, inflation fears have divided Bulgarians. Only a fifth of them approve the 2026 target date, according to a poll published on May 22 .
'We're familiar with what's being done with regard to the so-called convergence reports,' Bulgarian Central Bank Governor Dimitar Radev told reporters in the city of Pleven on May 20 .
'The assessment is positive,' he said. 'Our assessment is that we're completely ready.' BLOOMBERG
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