Inflation too high

Bulgaria narrowly misses out on joining the eurozone

(Bild: stock.adobe.com/luzitanija)

In order to be allowed to adopt the euro as its currency, an EU country must fulfill a number of criteria. Bulgaria is close to doing so, but because inflation is too high, its hoped-for entry into the eurozone at the beginning of 2025 has now been delayed.

This is according to the EU Commission's so-called convergence report, which was published in Brussels on Wednesday. Brussels will continue to work with the country and welcomes Bulgaria's ambition to become a member of the eurozone, said a spokesperson for the Brussels authority at a press conference. She did not want to give a date for possible euro accession. In principle, the convergence reports are published every two years, but Bulgaria can also request a new report before then if it believes it meets all the criteria.

According to the ECB, average inflation in Bulgaria over the last twelve months was 5.1 percent.

(Bild: APA/dpa/Sebastian Gollnow)

Average inflation well above the threshold
However, meeting the criteria is only a first step; in a further step, the member states in the EU Council must approve the Commission's proposal. On Wednesday, the European Central Bank (ECB) also published its own convergence report and came to a similar conclusion as the EU Commission. As of May, Bulgaria's average inflation rate over the past twelve months was 5.1 percent, well above the 3.3 percent that would have been required. The price stability criterion states that inflation may not exceed the inflation rate of the three euro countries with the lowest inflation by more than 1.5 percentage points on average over a year.

In the medium term, the ECB expects the inflation rate in Bulgaria to fall. In the long term, however, the central bankers fear that inflation in the Eastern European country could remain well above the required average. In the course of a general economic convergence of the country to the EU level, prices there are also likely to adjust. Currently, they are still well below the average of the euro countries.