Bulgaria’s bid to join the Eurozone has been approved by Eurozone finance ministers. The country is thus one step closer to the adoption of the single currency after it had met the euro convergence criteria to adopt it. The so-called Maastricht criteria – the criteria EU members need to meet to adopt the euro as their currency – include low inflation, healthy public finances and exchange rate stability. The news is a great success for Bulgaria, which is the EU’s poorest economy as some analysts had previously cast doubt over its prospects to join the Eurozone.
Under the plan of joining, Bulgaria is now going to join the EU’s banking union in approximately a year’s time. The members of the banking union transfer to EU bodies the powers to oversee their top banks and deal with problematic lenders. As part of the preparations for the Eurozone, Bulgaria will need to strengthen its banking sector and its anti-money laundering systems. Member states that want to join the single currency area are not required to become the members of the banking union but European authorities demanded that Bulgaria would be better off joining to extract more guarantees from the country.
Sofia commented that it was committed to improve a number of policy areas that are relevant to a painless transition to joining the bloc’s ERM-2 exchange rate mechanism in the coming months. “We expect to join simultaneously ERM-2 and banking union by July 2019,” Bulgarian Finance Minister Vladislav Goranov and the country’s central bank’s governor Dimitar Radev commented. European leaders welcomed Bulgaria’s intention to progress towards the Eurozone.