Sofia had expressed hope that it could join the EU currency area by the middle of next year, but strict economic criteria must be met.
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The European Central Bank said in a report on Wednesday that Bulgaria cannot join the eurozone due to high inflation rates.
This is likely to be a disappointment for Sofia, which is seeking to become the currency bloc’s 21st member, despite public concerns that it will further exacerbate price increases in the Balkans.
“From 2022 onwards, there will be limited progress by non-euro area member states on economic integration with the euro area,” the ECB said in a press release.
Prices in Bulgaria are rising at an annual rate of 5.1%, 1.8 percentage points higher than required to join the currency union, the ECB said, but inflation is expected to decline “gradually over the coming months” as a supply bottleneck. “It’s likely to happen,” he added.
At a press conference today, Bulgarian Prime Minister Dimitar Grafchev referred to the findings and said he would request further evaluation from EU authorities once the country meets all euro criteria.
Countries do not automatically join the euro when they become EU members, but are expected to do so once they converge on legal and economic norms such as stable exchange rates and sound public finances. has been.
The only exceptions are Sweden and Denmark, which have negotiated political and legal opt-outs and have retained their national currencies.
political turmoil
On June 4, Bulgarian news agency BTA reported that Deputy Finance Minister Metodi Metodiyev said that Bulgaria could join the euro in mid-2025, as the easing of the economic situation would allow it to request an additional review from the EU. He expressed his expectations.
But just days later, the country was thrown into political turmoil by national and European elections that saw far-right gains.
The pro-Russian ultranationalist Vazrajdane party won around 14% of the vote and three of the country’s 17 parliamentarians after claiming the euro would destroy Bulgaria’s economy.
The GERB party, led by former Prime Minister Boyko Borisov, will now need at least two partners to form a coalition government, but abandoning Lev may not result in a vote-winner.
According to the Eurobarometer survey, only 49% of Bulgarians support joining the euro, and 64% of Bulgarians believe it will further increase prices.
inflation concerns
After the pandemic, inflation rose to 17% in some EU countries as the Ukraine war increased the cost of energy and food.
The ECB, which is responsible for keeping inflation at around 2%, is checking how inflation rates in euro member countries compare to Denmark, Belgium and the Netherlands, which were the EU’s best performers last year.
The remaining EU member states, the Czech Republic, Hungary, Poland and Romania, have not aligned their laws with EU standards and do not participate in the exchange rate mechanism, a means of avoiding wild currency fluctuations with the euro. .
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Romania was tasked by Brussels in early June with the EU’s highest budget deficit (7%) in 2025.
This follows years of warnings for the city of Bucharest to balance the books and reform taxes and public sector wages.
Hungary, led by Prime Minister Viktor Orban, has long been skeptical of Europe, and ministers in Warsaw remain wary of abandoning the zloty, even though relations with Brussels have improved since Prime Minister Donald Tusk took office.
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Updated (June 26, 13:41): Added comment from Grafchev.
