Staff of Reuters Read for 2 minutes Reuters, SOFIA, June 30 – Bulgaria is on track to adopt the euro currency on January 1, 2024, and wants to begin accepting payments in euros immediately after joining the euro zone, according to government and central bank officials. Last July, Bulgaria, one of the European Union’s poorest member nations, was allowed to the ERM-2 mechanism, a pre-requisite for joining the euro, along with Croatia. Bulgarians will be able to pay in the national lev currency a month after the euro is adopted, according to a draft national plan approved on Wednesday for Bulgaria’s euro zone admission. One of the most significant challenges nations face when adopting the euro is that they can no longer use the exchange rate as a buffer against economic shocks. However, Bulgaria already pegs its lev currency to the euro and intends to embrace the single currency at its present fixed rate. “The euro will be introduced without a transition period, and the date of adoption will coincide with the euro’s introduction as an official unit of payment,” the central bank and the finance ministry said in a joint statement. “The conversion will be carried out by applying the euro-lev fixed exchange rate in an irreversible manner.” The proposed national plan is awaiting government approval following public hearings, according to a joint statement from the central bank and the finance ministry. Despite anticipated inflationary pressures as it converges with the stronger euro zone economies, Bulgaria now meets the nominal criteria for entering the euro zone and expects to be compliant when the euro is adopted. Bulgaria is one of the least indebted member states of the European Union. Despite increased spending to mitigate the impact of the coronavirus on jobs and businesses, the country’s fiscal deficit was only 3% of GDP last year. (Tsvetelia Tsolova contributed reporting, and Nick Zieminski edited the piece.)/n
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