In order to adopt the euro as a currency, an EU country must meet a number of criteria. Bulgaria is close, but high inflation has now postponed its hoped-for entry into the eurozone in early 2025.
This is evident from the European Commission’s so-called convergence report, which was published in Brussels on Wednesday. Brussels will continue to work with the country and welcomes Bulgaria’s ambition to join the eurozone, a spokeswoman for the Brussels authority said at a press conference. She did not want to give a date for possible entry into the euro. In principle, the convergence reports are published every two years, but Bulgaria can also request a new report in advance if the country believes it meets all the criteria.
Average inflation well above the limit
However, achieving the criteria is only a first step in the next step; the Member States in the Council of the EU must agree to the Commission’s proposal. On Wednesday, the European Central Bank (ECB) also published its own convergence report and came to a similar assessment as the European Commission. As of May, average inflation in Bulgaria over the past 12 months was 5.1 percent, well above the 3.3 percent that would have been needed. The price stability criterion states that, on average, inflation in one year may not be more than 1.5 percentage points above the inflation rate of the three euro countries with the lowest inflation.
In the medium term, the ECB expects inflation in Bulgaria to decline. In the long term, central bankers fear that inflation in the Eastern European country will remain well above the required average. As the country’s economy approaches EU levels, prices there are also likely to be adjusted. Currently, they are still well below the average for the eurozone.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
