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EU allows Bulgaria to use euro from 2026, but wants it to 'fight corruption'

Bulgaria is set to adopt the euro as its official currency starting January 1 next year, becoming the 21st member of the eurozone and deepening its integration into the European Union amid regional instability read more A Protester holds a poster reading 'Preserve Bulgarian Lev. Win the battle!' during an anti-Euro protest in Sofia, Bulgaria on May 31, 2025. AP File Bulgaria is set to adopt the euro as its official currency starting January 1 next year, becoming the 21st member of the eurozone and deepening its integration into the European Union amid regional instability. According to a Politico report, the European Commission and the European Central Bank have approved the move, acknowledging Bulgaria's progress in meeting key economic requirements, despite ongoing concerns about money laundering and political corruption. 'The answer that we give to Bulgaria is yes,' Politico quoted Commission official Massimo Suardi as telling reporters in Brussels on Tuesday. However, 'there are a number of policy challenges Bulgaria still needs to tackle … related to the fight against corruption, judicial independence, and efficiency of the public administration, public procurement,' Suardi added. STORY CONTINUES BELOW THIS AD 'Joining the euro area is the best investment Bulgaria can make in its future,' European Commission Vice President Valdis Dombrovskis told Politico on Thursday, adding that eurozone membership would benefit Bulgaria just as it has supported Latvia and the other Baltic states. 'Given the geopolitical situation in the region and Russia's war against Ukraine, the euro acts as a shield … Our savings are safe, the currency is stable and our countries have proven resilient in the face of consecutive economic shocks,' said Dombrovskis. He added that 'our economies and companies have benefited from the removal of currency conversion costs, increased price transparency, access to cheaper financing and greater interest from international investors.' The move binds one of the EU's poorest countries more tightly into the bloc's institutional structures at a time when Russia is exerting economic, political and even military pressure on its former eastern-bloc neighbors, leading some to flirt with a more Kremlin-friendly foreign policy. EU officials expect smooth approval of Bulgaria's eurozone entry, with no opposition anticipated when EU finance ministers vote on July 8. Bulgaria, home to 6.4 million people, pledged to adopt the euro back in 2007 but faced repeated delays due to unmet economic and legal standards. High inflation after the pandemic and the Ukraine war derailed previous bids for 2024 and 2025. STORY CONTINUES BELOW THIS AD Now, with inflation averaging 2.7% and public debt at just 24.1% of GDP — second lowest in the EU — the country has met key criteria. European Commission official Suardi praised Bulgaria's flexible labour market and strong fiscal discipline, calling recent price rises 'temporary.' 'I wish to congratulate Bulgaria on its tremendous dedication to making the adjustments needed,' Politico quoted ECB Chief Economist Philip Lane as saying in a separate briefing. But concerns linger — inside the country and outside. On Saturday, thousands of people took to the streets in Bulgaria, calling on the government to preserve the lev, which has been the country's currency to date. As is usual during such transitions, there are fears that merchants and companies will use redenomination as an opportunity to raise prices, while increased trade with the rest of the bloc may also drag local prices higher. 'Ensuring price transparency and combating abusive price increases will require a special effort,' Dombrovskis warned, but noted that other countries that had made the same step had ultimately overcome any issues it created. In its report, the European Central Bank warned that Bulgaria must adopt sound policies alongside euro adoption to safeguard competitiveness and avoid unsustainable credit growth or broader economic imbalances. STORY CONTINUES BELOW THIS AD While Bulgaria continues to have the EU's lowest hourly labour costs, the ECB stressed that wage growth must align with productivity to maintain investor confidence and economic stability. With inputs from agencies