Latest news with #ExchangeRateMechanismII
Fibre2Fashion
10-07-2025
- Business
- Fibre2Fashion
Bulgaria to become 21st euro area member from January 2026
The Council of the European Union has formally approved Bulgaria's accession to the euro area, with the transition set for January 1, 2026. The lev will be converted at a fixed exchange rate of 1.95583 per euro, aligning with its central rate under the Exchange Rate Mechanism II (ERM II), which Bulgaria joined on July 10, 2020, ECB said in a release. The EU Council has approved Bulgaria's euro area entry from January 1, 2026, with the lev fixed at 1.95583 per euro. Backed by the European Parliament and confirmed by the 2025 Convergence Report, Bulgaria meets all criteria. The ECB has supervised Bulgarian banks since 2020. Bulgaria will be the 21st euro area member, after Croatia in 2023. The decision follows a strong endorsement from the European Parliament, where Members of the European Parliament (MEPs) voted in favour of Bulgaria's adoption of the euro, with 531 votes in support, 69 against, and 79 abstentions. The vote confirms that Bulgaria meets all required convergence criteria, the European Parliament said. 'Today's vote sends a clear signal: Bulgaria is ready to join the Euro area. All criteria have been met, and this step marks a key milestone towards Bulgaria's full European integration - for the country and its citizens,' Rapporteur Eva Maydell (EPP, BG) said after the vote. The European Commission had already confirmed Bulgaria's readiness in its 2025 Convergence Report, published in June following a formal request from Sofia in February. Bulgaria's euro adoption follows years of preparation, including the start of close cooperation between the European Central Bank (ECB) and Bulgarian National Bank in October 2020. Since then, the ECB has been supervising Bulgaria's banking system, directly overseeing four significant institutions and monitoring 13 others. With this transition, Bulgaria will become the 21st member of the euro area. Croatia was the most recent country to adopt the euro, joining in 2023. Fibre2Fashion News Desk (HU)
Irish Examiner
20-06-2025
- Business
- Irish Examiner
Euro zone finance ministers recommend Bulgaria adopt euro in 2026
Euro zone finance ministers recommended on Thursday that Bulgaria become the 21st member of the euro zone starting January 1, 2026, backing earlier positive assessments of the country's readiness from the European Commission and the European Central Bank. "The Eurogroup agreed today that Bulgaria fulfils all the necessary conditions to adopt the euro," Paschal Donohoe, who chairs meetings of euro zone finance ministers, told a press conference. The recommendation will now be formally adopted by all 27 EU finance ministers on Friday and then by EU leaders on June 26. The exchange rate at which the Bulgarian lev will be converted into euro will be set by EU finance ministers at their meeting in early July, giving Bulgaria six months to prepare the technical transition for the start of the year. Bulgaria has been striving to switch its lev to the euro since it joined the European Union in 2007. But after such a long wait, many Bulgarians have lost their initial enthusiasm, with 50% now sceptical about the euro, according to a Eurobarometer poll in May. Some Bulgarians fear the currency switch will drive up prices. Criteria To get the positive recommendation, Bulgaria had to meet the inflation criterion, which says that the euro candidate cannot have consumer inflation higher than 1.5 percentage points above the three best EU performers. In April, the best performers were France with 0.9%, Cyprus with 1.4% and Denmark with 1.5%, which put Bulgaria with its 2.8% just within the limit. The euro candidate country also cannot be under the EU's disciplinary budget procedure for running a deficit in excess of 3% of GDP. Bulgaria meets this criterion with a budget deficit of 3% in 2024 and 2.8% expected in 2025. The country's public debt of 24.1% of GDP in 2024 and 25.1% expected in 2025 is well below the maximum level of 60%, and its long-term interest rate on bonds is well within the two-percentage-point margin above the rate at which the three best inflation performers borrow. Finally, Bulgaria had to prove it had a stable exchange rate by staying within a 15% margin on either side of a central parity rate in the Exchange Rate Mechanism II. This was easily done because Bulgaria has been running a currency board that fixed the lev to the euro at 1.95583 since the start of the euro currency in 1999. Bulgaria's euro adoption will come three years after the last euro zone expansion, when Croatia joined the single currency grouping at the start of 2023. The accession of Bulgaria into the euro zone will leave only six of the 27 EU countries outside the single currency area: Sweden, Poland, Czech Republic, Hungary, Romania and Denmark. None of them has any immediate plans to adopt the euro either for political reasons or because they do not meet the required economic criteria. Reuters.
