Bulgaria’s hopes of joining the eurozone by mid-2025 have been dashed by the European Central Bank, citing high inflation as a major hurdle. Despite Sofia’s desire to become the 21st member of the currency union, concerns about exacerbating price rises in the Balkan state have been raised. Bulgaria’s annual inflation rate of 5.1% exceeds the criteria needed to join the eurozone, but the ECB believes that inflation will gradually decrease in the coming months as supply bottlenecks ease. Bulgarian Prime Minister Dimitar Glavchev acknowledged the findings and expressed intention to request a further assessment from EU authorities once all euro criteria are met.
Countries hoping to join the eurozone must demonstrate economic convergence with the euro area, including stable exchange rates and sound public finances. However, political turmoil in Bulgaria following national and European elections has complicated its path to eurozone membership. The strong performance of the far-right Vazrazhdane party, which opposes joining the eurozone, has raised doubts about the country’s future currency policy. A Eurobarometer survey indicates that only 49% of Bulgarian citizens support joining the euro, with concerns that it will lead to higher prices.
Inflation concerns across the EU have been heightened by the pandemic and the ongoing war in Ukraine, which have caused inflation rates to soar in some countries. The ECB aims to keep inflation around 2% and compares inflation levels in euro candidates with the best performers in the EU. Countries such as Czechia, Hungary, Poland, and Romania have yet to align their legislation with EU norms and have not joined the exchange rate mechanism to avoid volatile currency movements with the euro. Romania, in particular, has faced criticism for its high budget deficit, despite years of warnings to address fiscal imbalances and reform tax policies.
Political skepticism towards eurozone membership is evident in countries like Hungary and Poland, where leaders have expressed euroscepticism and caution about adopting the euro. In Bulgaria, the issue of joining the eurozone has become a divisive topic, with concerns about the potential impact on prices and the economy as a whole. While the government in Sofia remains determined to meet the criteria for eurozone membership, the recent political upheaval and lack of public support may pose significant challenges in the country’s path towards adopting the euro. Subscribe to “The Policy Briefing” newsletter for the latest updates on EU policy developments and key events.
