Brussels – Bulgaria, it is Euro time. The country has what it takes to adopt the single currency from 1 January 2026, allowing the eurozone to expand again, following the most recent enlargement with Croatia in 2023. The European Commission believes that Sofia has done well and finally meets all the parameters and requirements to leave the Lev and introduce the euro. Now, it will be up to the EU Council to decide by a qualified majority, and if everything goes as planned by the von der Leyen team before the summer break, the process should be concluded.
Four macroeconomic parameters must be met. The first is price stability, i.e., the inflation level. Bulgaria’s index is considered “relatively low” (2.8 percent) and stable. As for budgetary stability, the second benchmark, there is no excessive deficit procedure for the government in Sofia, nor is there any on the horizon: the government deficit as a ratio of GDP has increased from 2 percent in 2023 to 3 percent in 2024, and the European Commission’s forecasts indicate a reduction to 2.8 percent in 2025 and 2026. Furthermore, Bulgaria has “successfully participated in the European Exchange Rate Mechanism (without severe tensions) for almost five years,” demonstrating exchange rate stability, and most recently, “Bulgaria’s long-term interest rate is stable at or close to 4 percent since April 2023”.
Everything is in order, then. Not only that, but the EU executive believes Bulgaria is “well prepared to function effectively within the euro area.” This is because the country enjoys a “solid external position.” Its products, services, and financial markets are ‘well integrated’ with those of the euro area, while its economic cycles are ‘well synchronized’ with those of the eurozone. In addition, the country already has one foot in the Eurosystem, as the accession to the Banking Union in 2020 has led to the direct supervision by the European Central Bank of five commercial banks in Bulgaria, which hold about three-quarters of all banking sector assets.
“Bulgaria has met all the convergence criteria to become the 21st member of the Eurozone“, confirms a satisfied Valdis Dombrovskis, Commissioner for the Economy. However, after the appropriate enthusiasm and ritual congratulations, he urges not to rest on one’s laurels and to continue on the path of reform: “Bulgaria’s successful integration into the eurozone will require constant and rigorous policies to strengthen the competitiveness and resilience of the Bulgarian economy.”
Therefore, from January 1, 2026, the single currency will also be able to start circulating in Bulgaria. This, at least, according to the opinion of the European Commission. The recommendation goes to the Council, where work can begin immediately. On June 19, the Eurogroup could already produce the appropriate recommendations for a political agreement in the Ecofin Council the following day. A qualified majority is needed to open the door to Euroland’s 21st member. Then, the leaders’ summit at the end of the month (June 26-27) could grant the political go-ahead and allow the EU Commission to adopt the proposed accession regulation with the conversion rate (currently set at 1 euro for 1.955 lev). The Commission is ready to produce it as early as June 30, to enable the European Parliament to vote in the plenary session (July 8), before the summer recess and allow Sofia to finish preparations to introduce the official EU currency.
The euro adoption in Bulgaria would make 21 out of 27 EU Member States with the single currency. Of the remaining six, only Denmark is exempt from the obligation to exchange its national currency, as it negotiated the option not to join when it joined the EU. On the other hand, Sweden is constrained by the 2003 referendum, in which the population rejected the adoption of the euro.
English version by the Translation Service of Withub
