Bulgaria is still failing to meet two of the conditions for adopting the euro. This is clear from the European Commission’s (EC) Convergence Report 2022.
The report assesses the progress that each member state of the European Union (EU) has made on its path to the single currency of the Old Continent. It also forms the assessment of the decision of the Council of the EU, with which individual countries can adopt the euro.
The four main criteria include price stability linked to inflation, the state of public finances in relation to deficits and debt, exchange rate stability, and long-term interest rates.
According to the EC, Bulgaria still does not meet the criteria for the adoption of legislation on the euro and the stability of prices and inflation levels.
Sofia fulfills the conditions related to the state of public finances, exchange rates and long-term interest rates.
Sweden is also failing in two directions. Stockholm is also expected to make progress on legislation as well as on exchange rates.
The other European countries that are not part of the Eurozone – Poland, Romania, Hungary and the Czech Republic – do not meet more than the mandatory criteria.
The only other country that is a member of the EU but does not use the single European currency is Denmark. However, it benefits from an exception in its Accession Treaty, which allows it not to adopt the euro.
All EU Member States are obliged to adopt the European currency once they meet the necessary conditions. It is up to each country to approach the eurozone, and none of them is limited in time.
The European Commission notes that Croatia, which last joined the EU in 2013, is fully ready to adopt the euro on January 1st, 2023. A few days ago, the Zagreb parliament passed a law adopting the euro early next year. Croatia applied to join the eurozone in the summer of 2019, one year after Bulgaria.
One week ago, the Bulgarian government adopted the plan for the introduction of the euro in Bulgaria, and the deadline for the Cabinet to set this to happen was January 1, 2024. The main part of it was related to making changes in the laws to adapt to the standards set by the EC.
Although the decision was adopted by the Council of Ministers, the ministers of the BSP and “There is such a people” voted against it. They justified their actions by the lack of economic analysis of the possible consequences of the adoption of the single currency, as well as by the lack of discussion among coalition members.
A day after the decision, the leader of the pro-Russian Vazrazhdane, which is in favor of Bulgaria’s withdrawal from NATO and the EU, Kostadin Kostadinov, said the party was launching consultations to initiate a national referendum for or against adopting the euro. The decision itself was described by Kostadinov as “another national betrayal” by Kiril Petkov’s cabinet.
Against the decision is the former caretaker Prime Minister and leader of the newly formed Bulgarian Rise party Stefan Yanev. He described the situation as the closure of “the last remnant of the sovereignty of the Bulgarian state”.