Bulgaria on the path to the Eurozone: EU to approve accession application from January 1, 2026

The EU will soon approve Bulgaria's application to join the euro as early as January 1, 2026, making it the 21st member of the bloc's currency union, UNN reports, citing POLITICO.

Details

After years of waiting, several officials told the media that the European Commission and the European Central Bank (ECB) are expected to finally give their blessing in a report to be released next Wednesday.

Bulgaria's accession to the euro will help the country increase trade with the rest of the bloc, reduce transaction costs and strengthen its influence in Brussels.

"Joining the euro will only strengthen Bulgaria's (sovereignty) — we will participate in the ECB's decision-making process," Atanas Pekanov, a Bulgarian economist and former deputy prime minister, told POLITICO.

For decades, the lev — the local currency — has been pegged to the euro, but the country has had no say in the ECB's monetary policy decisions because it was not a member. If Bulgaria joins the single currency as planned in 2026, Bulgaria's central banker will take an official seat on the ECB's Governing Council. However, as the country will only be the 13th largest member of the union, accounting for less than 1 percent of its gross domestic product, its influence on the Council will be limited.

Add

However, critics warn that the move is not without risk. For example, the adoption of a single currency could trigger at least a one-off rise in prices — especially hurting poorer households in rural areas — as businesses take advantage of the transition.

In the medium term, low domestic prices also tend to adapt to higher European norms through increased trade within the bloc. This has been typical of recent countries such as Slovakia, Estonia and Lithuania, all of which initially experienced an increase in inflation.

The most acute concern is that inflation will hit basic goods such as vegetables, especially in rural areas where consumers have less choice.

"(Rural voters are skeptical) not because they are Eurosceptics, but because of concerns about the rising cost of living," said Pekanov, who is a major supporter of joining the euro.

Listening to such concerns, Bulgarian President Rumen Radev caused shock across the country by announcing earlier this month that he wanted to hold a national referendum to postpone the country's accession to the euro.

However, this is unlikely to be allowed by the country's Constitutional Court, which has already ruled in previous cases that such a vote would be unconstitutional.

Radev's statement is also unpopular in parliament, where most Bulgarian parties support the adoption of the euro.

Sofia is currently on track to meet the criteria for joining the eurozone, having reduced inflation to the target level — one of the biggest obstacles in the process to date.

To join the eurozone, Bulgaria's average inflation rate from April 2024 to April 2025 must be within 1.5 percentage points of the level of the three EU countries with the lowest inflation.

In 2024, these were Ireland (1 percent), Italy (1.4 percent) and Luxembourg (1.6 percent).

Inflation in Bulgaria has fallen from 4.7 percent in 2023 to 2.6 percent in 2024. But it is expected to rise to 3.6 percent this year — well above the eurozone rate of 2.1 percent for 2025 — mainly due to the increase in VAT on many items at the beginning of the year.