Bulgaria could potentially adopt the euro on July 1, 2025, if all the necessary steps are taken within the required timeframe. According to an analysis by Stanislav Popdonchev, Deputy Chairman and Chief Financial Officer of the Bulgarian Chamber of Commerce, Bulgaria has time to meet the conditions for euro adoption by mid-2024, allowing for a decision by the Council on the country’s entry into the eurozone. If the Council approves, Bulgaria could introduce the euro as its official currency approximately six months later.

The key factor for Bulgaria’s euro adoption is meeting the inflation criterion, which remains a crucial issue for many Bulgarian businesses as they update their 2025 budgets, investment plans, and strategies. This has become particularly important with the approaching year-end, as businesses anticipate the potential impact of this major shift in the economic environment.

In late July 2024, the National Assembly of Bulgaria adopted a decision to accelerate preparations for adopting the euro. The decision outlines specific steps, including the demand for extraordinary convergence reports from the European Commission (EC) and the European Central Bank (ECB) once Bulgaria fulfills the price stability criterion. The government has set a target of December 31, 2024, to meet this criterion, after which it will request the date for Bulgaria’s entry into the eurozone.

As of now, Bulgaria’s inflation does not yet meet the necessary threshold. However, there is optimism that the country will achieve the required inflation levels in the coming months. The ECB and EC regularly assess the readiness of non-eurozone EU member states to adopt the euro. These convergence reports, typically published every two years, serve as the basis for the Council’s decision on euro adoption. The last regular Convergence Reports were published in June 2024, and Bulgaria can request an extraordinary report, which would likely be prepared more quickly than a regular one since it would only focus on Bulgaria.

The European Union’s Council, based on reports from the EC and ECB, as well as opinions from the European Parliament, will make the final decision on Bulgaria’s eurozone membership. This decision involves the cancellation of Bulgaria’s derogation from the eurozone, which will be formalized through at least three key pieces of legislation: a Council Decision on Bulgaria adopting the euro, a Council Regulation on the introduction of the euro, and a Regulation determining the exchange rate between the lev and the euro.

Once Bulgaria formally requests to join the eurozone, the other euro area member states will provide a recommendation, which must be approved by a qualified majority in the Council. This recommendation, along with the reports from the EC and ECB, will ultimately determine whether Bulgaria can adopt the euro by July 1, 2025.