Bulgaria said it won’t meet the criteria to adopt the euro in January 2024 as planned, a blow to the poorest European Union member’s efforts to integrate more deeply with the bloc.
(Bloomberg) — Bulgaria said it won’t meet the criteria to adopt the euro in January 2024 as planned, a blow to the poorest European Union member’s efforts to integrate more deeply with the bloc.
The Black Sea country was planning to switch to the single currency a year after its Balkan peer, Croatia, which joined last month. But Bulgaria has been locked in a political crisis that’s paralyzed policymaking and triggered multiple snap elections. The next vote, slated for April 2, will be the fifth in two years.
“We just haven’t fulfilled the requirements,” Finance Minister Rositsa Velkova told reporters Friday. If there isn’t any clarity over a new target date, this “would affect both the credit rating and the debt yields in a negative direction,” she said.
The last parliament failed to approve necessary legislation and the government won’t request an assessment by the European Commission and the European Central Bank needed to advance the process, she said.
Another EU integration goal — joining the Schengen travel-free area — failed in December over doubts about Bulgaria’s ability to tackle corruption and protect the bloc’s external borders.
Successive governments in Sofia have pushed to advance the euro path since 2016 in a bid to raise living standards and integrate deeper into the EU’s financial system.
The country has faced numerous setbacks, as it had to overcome doubts among member states about the stability of its banking system and the health of its economy following the sovereign debt crisis in neighboring Greece and money-laundering scandals in the euro area’s Baltic states.
For years, Bulgaria met the bloc’s formal criteria for its budget deficit, and it has one of the EU’s lowest debt levels.
But the political crisis has delayed other preparations, with several parties, including the pro-Russian Socialists and nationalists, demanding a referendum on adopting the single currency. Only a third of Bulgaria’s population backs the idea.
Velkova urged the next parliament to approve the necessary legislation and said Bulgaria may join the euro area as soon as January 2025. That may be difficult, however, as opinion polls show no front-runner ahead of the vote.
“An earlier date, such as July 1, 2024, is possible, a later date is also possible,” she said. “It all depends on whether we will meet the criteria and when will we meet them.”
(Updates with comments by finance minister from third paragraph.)
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