Bulgaria will join the Eurozone

Why in news?

• The European Union Council has allowed Bulgaria to adopt the Euro currency from January 1, 2026.
• With this, Bulgaria will become the 21st member of the Eurozone.

What is the Eurozone?

• The Eurozone is a group of countries that adopt the Euro as their official currency despite being members of the European Union (EU).
• Currently it includes 20 countries. With the inclusion of Bulgaria, this number will become 21.

Process of Bulgaria adopting the euro:

Bulgaria has fulfilled the "Maastricht criteria" required for euro adoption:

• Inflation control: 2.7% on average (limit 2.8%)
• Budget deficit: below 3%
• Public debt: less than 60% of GDP
• Long-term interest rate control
• Currency stability: successful participation in ERM-II (from 2020)

Formal approval:

• 4 June 2025: The European Commission and the European Central Bank (ECB) report declare Bulgaria 'ready'.
• 8 July 2025: The European Parliament and the Council pass the final legislative proposal.

What happens now?

• Bulgaria's current currency "lev" will be replaced at the fixed exchange rate of 1 euro = 1.95583 lev.
• From 1 January 2026 all transactions will be in euros.

About Bulgaria:

• Bulgaria is a Balkan country located in southeastern Europe whose capital is Sofia.
• Its current currency is the Lev, which will be replaced by the Euro from 1 January 2026.
• It is a member of the European Union (EU) and NATO.
• It borders Romania, North Macedonia, Serbia, Greece, Turkey, and the Black Sea.

European Union (EU):

• The European Union (EU) is a political and economic union consisting of 27 European countries.
• They work together with the aim of promoting mutual cooperation, peace, economic unity, and global influence.
• Beginning: In an effort to maintain peace after World War II.
• Formal establishment: In 1993 through the Maastricht Treaty.
• Previously called the European Economic Community (EEC).
• Headquarters: Brussels, Belgium
• Main objectives:
  • To promote economic integration and creation of a single market
  • To promote peace, stability and security
  • To ensure free trade, movement, services and flow of capital among member countries
  • To adopt a common currency (Euro) (not compulsory in all countries)
• Members: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.