Bulgaria is poised to adopt the euro, a significant step in its economic integration with the European Union. After years of dedicated effort, the nation has received critical endorsements from key European financial institutions, clearing the way for its expected Eurozone entry early next year.
Path to Eurozone Integration
Since joining the EU in 2007, Bulgaria has aimed to replace its lev with the euro. This ambition faced setbacks due to persistent inflation and political unrest. Last year, its bid was postponed as price pressures surged, exacerbated by Europe’s energy crisis following the conflict in Ukraine. However, recent progress is evident, with annual consumer price index (CPI) in April cooling to 3.5%, nearing the EU’s 3% target.
Fulfilling Economic Benchmarks
The European Central Bank (ECB) and European Commission confirm Bulgaria has met all stringent economic convergence criteria. These benchmarks cover public debt, budget deficits, inflation rates, interest rates, and exchange rate stability. This endorsement reflects Bulgaria’s commitment to necessary adjustments.
The final procedural step requires approval from euro area finance ministers, with the official green light anticipated around July 8.
Navigating Domestic Opposition
Despite these advances, Bulgaria’s euro journey faces internal resistance. Recent positive developments occurred amidst protests fueled by disinformation campaigns, both domestic and foreign, claiming euro adoption would worsen poverty and inflate prices.
President Rumen Radev supported anti-euro sentiment by proposing a referendum. However, the pro-European parliamentary majority rejected this, viewing Radev’s last-minute attempt as an effort to undermine the process, potentially aligning with external interests.
Benefits and Considerations of Membership
While some countries experienced modest inflationary spikes upon joining, the benefits of Eurozone membership are substantial. Adopting the euro can reduce borrowing costs, attract foreign investment, and streamline cross-border trade. Moreover, it grants Bulgaria a stronger voice and direct influence over the European Central Bank’s monetary policy.
Croatia was the most recent nation to join the Eurozone in 2023.
Jonathan Reed received his MA in Journalism from Columbia University and has reported on corporate governance and leadership for major business magazines. His coverage focuses on executive decision-making, startup innovation, and the evolving role of technology in driving business growth.