Bulgaria, the poorest country in the European Union, has ambitions to become the 20th country in the Eurozone. It meets most convergence conditions, but corruption and political uncertainty can be a problem.
A few days ago, Croatia became the 19th country in the Eurozone. Seven countries do not use a single currency, of which only Denmark has the treaty permission to keep its own currency and is in no hurry to join. Although at the time of joining the EU all other countries committed themselves to adopting a single currency, Poland, for example, is in no hurry to do so. There are no signals that would indicate that our country may be interested in an official change of currency.
Bulgaria is almost ready for the euro
If anyone joins the eurozone, then most likely it will be Bulgaria. The Commonwealth recalls that such an idea came from former Prime Minister Boyko Borisov. She was supported by the cabinet of Kirill Petkov, who was in power until July 2022. The current non-party technical government headed by Gylyb Donev does not deviate from these plans.
In the spring, the Bulgarian authorities will submit a formal request to the ECB and the European Commission for a convergence report assessing whether Bulgaria meets the conditions for adopting the euro.
The previous convergence report from June 2022 stated that Bulgaria had not met only two conditions for accession. The reservations caused legal regulations that were not fully adapted to the rules of the euro area, and inflation was too high. The criterion related to the state budget deficit (in the amount of 4.1% of Bulgaria’s GDP in 2021) has been suspended due to the effects of the pandemic.
Troubled eurozone member
A potential problem, which will be detailed in the spring report, could be inflation. The Maastricht criteria stipulate that over the previous 12 months, HICP inflation (ie calculated using the Eurostat basket) should not exceed 1.5 percentage points. than the average inflation in the three EU countries, where it was the lowest at the time. In November 2022, it reached 14.3% in Bulgaria, and an average of 7% for the three countries with the lowest inflation in the EU (Spain, France and Malta).
The obstacle that Bulgaria itself creates for both is political instability. It is possible that the next parliamentary elections will be held in 2023 and the transition to a single currency will become a side topic.
Rzeczpospolita notes that while the European Union is pleased with each new eurozone member, Bulgaria’s candidacy may prove problematic. It is the poorest country in the EU, struggling with high levels of corruption. Its banking sector has experienced a crisis in the last decade caused by the scandalous activities of some creditors, the newspaper lists.
Source: Wprost
