Common currency Bulgaria postpones introduction of the euro

Common currency: Bulgaria postpones introduction of the euro

Status: 02/17/2023 5:31 pm

Inflation is very high and the legal basis is not yet in place: Bulgaria has announced that it will not be able to introduce the euro in early 2024 as planned. The government now wants to reach that target by 2025.

The Bulgarian government has abandoned plans to introduce the euro in January 2024. “Bulgaria is behind schedule in passing the relevant legislation,” said Acting Finance Minister Rossitsa Velkova. Due to gaps in preparation, Bulgaria will not submit a convergence report at the end of February. This means that the planned introduction date of January 1, 2024 can no longer be met.

Velkova made it clear that Sofia’s government can present the convergence report after July – if the country meets the necessary criteria by then. If this succeeds, entry into the euro zone could take place no later than January 1, 2025, according to Welkowa. The prerequisite for this is the support of other member states.

Inflation rate well above the EU average

A central problem in Bulgaria is high price increases. According to Sofia’s official calculations, the inflation rate in 2022 was 15.3 percent. The 13% inflation rate calculated by the EU’s statistical authority, Eurostat, using a slightly different method, was also well above the EU average.

Bulgaria has been a member of the EU since 2007 and is already a member of the European System of Fixed Exchange Rates (ERM-2) – an important step on the way to the introduction of the euro. This is to ensure that the national currency does not fluctuate too much. “We didn’t keep our promises that we made when we joined the ERM-2 and we didn’t meet the inflation criteria,” Welkowa said.

country in crisis mode

Bulgaria is the poorest EU member state and hopes that the introduction of the euro will result in more investment and greater credit security.

However, the country is struggling with political crises. The fifth parliamentary elections in two years are scheduled for April this year. In the context of the dissolution of parliament and new elections, the necessary laws for the introduction of the euro could not be passed in time.

Bulgaria will not receive the euro until 2025 instead of 2024

Oliver Soos, ARD Vienna, 17 February 2023 18:15