Brussels formally approved Bulgaria’s years-long bid to join the euro area on Wednesday, paving the way for it to become the eurozone’s 21st member on 1 January 2026.
The Commission and the European Central Bank (ECB) said that Bulgaria – the EU’s poorest member state – had fulfilled the so-called “convergence criteria” to join the currency union.
“The euro will bring tangible benefits for Bulgarian citizens and businesses: stable prices, lower transaction costs, protected savings, more investment, and increased trade. Of course, the euro is more than a currency,” EU economy chief Valdis Dombrovskis said.
Sofia has long maintained low deficit and debt levels in its bid to join the currency but has persistently struggled to tame inflation, which has remained stubbornly high in the wake of the energy shock triggered by Russia’s full-scale invasion of Ukraine.
According to the Commission’s latest forecast, Bulgaria’s headline inflation rate is set to rise to 3.6% this year – well above the eurozone average of 2.4%.
However, Brussels noted that Bulgaria’s average inflation rate between May 2024 and April 2025 was 2.7%, which fulfilled the criterion of being below the 2.8% “reference value” calculated by adding 1.5 percentage points to the average inflation rate of the three euro area countries where price pressures are weakest.
Brussels also projects that Bulgaria’s inflation will drop back down to 1.8% in 2026, as the impact of the reinstated VAT on bread and restaurants introduced at the start of this year fades and wages moderate.
The announcement marks a significant victory for Sofia’s government. Conservative Premier Rosen Zhelyazkov’s minority government, the Bulgarian central bank, and the majority of the country’s parliament strongly support joining the euro, arguing that the move will boost trade and lower financial transaction costs in the export-dependent economy.
They also note that accession to the single currency area will afford Sofia greater control of monetary policy by allowing the head of its central bank, Dimitar Radev, to sit on the ECB’s Governing Council, the bank’s main rate-setting body.
While Bulgaria’s currency, the lev, has been pegged to the euro since 1999, the country currently has no say over ECB policy.
Brussels’ announcement comes in spite of recent major protests across dozens of cities in the country, with many citizens concerned that the currency switch could lead to steep price rises, especially for food.
The protests have been backed by the far-right Revival party, Bulgaria’s third-largest political force, and the President, Rumen Radev. Both have called for a referendum on euro accession but have been stymied by the country’s parliament and courts.
High levels of corruption and years of political instability have also fuelled anti-establishment sentiment in the country, where the average GDP per capita is just €24,200: the lowest in the EU.
Commission officials downplayed fears of price increases, arguing that experience indicates that the total price increase after accession will be “extremely small, almost marginal.”
They also noted that European and Bulgarian authorities would “monitor” the situation to ensure that businesses do not take advantage of the currency switch by hiking prices to unwarranted levels.
Bulgaria is only the second country to join the euro this decade, after Croatia. Many of the EU’s 27 member states remain scarred by the memories of the eurozone crisis in the 2010s, which almost triggered the currency union’s disintegration.
The European Parliament and other eurozone member states must now formally greenlight Bulgaria’s accession. The final approval could come as early as 8 July.
(mm)