Status: 02/17/2023 5:31 p.m
Inflation is too high and the legal basis is not yet in place: Bulgaria has announced that it will not be able to introduce the euro at the beginning of 2024 as planned. The government now wants to achieve this goal by 2025.
The Bulgarian government has abandoned plans to introduce the euro in January 2024. “Bulgaria is lagging behind in passing the relevant legislation,” said Acting Finance Minister Rossitsa Velkova. Due to failures 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 the government in Sofia might submit the convergence report after July – if the country should meet the necessary criteria by then. If that succeeds, entry into the euro zone could take place on January 1, 2025 at the latest, according to Welkowa. The prerequisite for this is the support of the other member states.
Inflation rate well above EU average
A central problem in Bulgaria is the high price increases. According to Sofia’s official calculations, the inflation rate in 2022 was 15.3 percent. The inflation rate of 13 percent calculated by the EU 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 introducing the euro. This is to ensure that the national currency does not fluctuate too much. “We haven’t kept our promises that we made when we joined the ERM-2 and we don’t meet the inflation criteria,” Welkowa said.
country in crisis mode
Bulgaria is the poorest member state of the EU and hopes that the introduction of the euro will result in more investments and greater credit security.
However, the country is struggling with political crises. The fifth parliamentary elections within two years are due in April of this year. Against the background of the dissolution of parliament and the new elections, the laws required for the introduction of the euro could not be passed in time.