Bulgaria Nears Eurozone Entry: Law Adoption Expected by Summer's End

The Law on the introduction of the euro could be approved by the National Assembly before the summer concludes, according to acting Deputy Finance Minister Metodi Metodiev's projection today. Metodiev also stated that Sofia is expected to meet the inflation criteria required for Eurozone entry by the year's end, based on the department's models.

Metodiev highlighted the ongoing decline in inflation, though it remains insufficient. He reiterated Bulgaria's potential to request an extraordinary convergence report once it fulfills the nominal criteria for Eurozone membership among the 20 nations using the common currency.

Key legislative tasks prior to eurozone entry include enacting two significant laws - the new Law on the Bulgarian National Bank and the Law on the introduction of the euro. Unlike the Law on the BNB, which was adopted in February and evaluated in the regular convergence report, the Law on the introduction of the euro, crafted over the past year and a half, will not undergo European Commission assessment, Metodiev clarified.

While Bulgaria and Croatia entered the ERM II currency mechanism, or the "eurozone waiting room," simultaneously in July 2020, Croatia managed to join the Eurozone on January 1, 2023. Experts suggest Bulgaria's delayed adoption of the euro, attributed to the failure to meet the necessary inflation indicator, might postpone its accession, initially slated for January 2025.

Although Bulgaria meets other criteria for euro adoption, such as a low public debt-to-GDP ratio and stable exchange rates due to the currency board and ERM II membership, inflation remains problematic. It must not exceed by more than 1.5 percentage points that of the three best-performing countries in the Eurozone.