Behind an imposing wooden desk in Sofia, in a complex once housing a statue of Lenin, the man who presides over the 20-strong group of eurozone finance ministers chose his words carefully.
“I am strongly convinced that Bulgaria will join the euro area in 2025,” Paschal Donohoe said. “The question is when your country will introduce the euro as its currency. And not if.”
Flanked by the country’s prime minister, deputy prime minister, and foreign minister, his presence carried plenty of European political heft. A month on, the coalition government has collapsed and those three ministers have all been swept from office. Donohoe’s visit ― drumming up support for Bulgaria’s wobbling bid to become the 21st country to use the euro ― turned out to be at a less than ideal time.
Experts and politicians who spoke with POLITICO are convinced the January 1, 2025, target date is not going to be met ― not just because of Bulgaria’s political turmoil but also because of persistent inflation and lack of popular backing.
“We’re in the middle of a political crisis,” Bulgarian socialist MEP Petar Vitanov said. That would make it “impossible” for the country to join the eurozone by the beginning of the year. Its sixth national election since 2021 takes place in June.
“We really don’t know what will be the next government and whether this is going to be one of their priorities,” he said.
Even before the government fell, the country was signaling it could miss its intended entry date. Then-Prime Minister Nikolay Denkov said in January the target was “not sacred.” Bulgaria originally intended to join the common currency at the start of 2024, but had to push that target back a year early last year as it did not yet meet the accession criteria.
January 2026 “at the earliest” would be more realistic given the technical challenges involved in switching a national currency over, according to Cinzia Alcidi, a senior research fellow at the Brussels-based think tank CEPS.
Several political leaders, including the country’s central bank governor, have raised the prospect of a mid-2025 entry if it cannot make a January entry date — hence Donohoe’s careful wording that he expected membership “in 2025.”
But officials and experts involved with the technical aspects of accession told POLITICO that joining mid-year would be untypical. Countries usually join at the start of the year for administrative reasons.
Bulgarian MEP Eva Maydell, from the center-right EPP group, said she was “optimistic for an accession date in 2025,” adding that “it could be January 1, it could be later.”
Blighted by rising prices
Eurozone accession is a typically arcane EU process where countries are rated by the European Central Bank before EU finance ministers, MEPs and heads of government discuss the matter.
The “convergence criteria” a country needs to meet to qualify include having a stable exchange rate, hitting targets on government deficit and debt ratio, and aligning national legislation with EU law.
The next ECB report on Bulgaria — which will determine whether it is ready to join — is expected before the summer.
Inflation remains a problem. To join, Bulgaria needs an average of no more than 1.5 percentage points above the rate of the three “best-performing” EU countries — a fuzzy category which creates a gray area for the exact inflation figure needed. The most recent joiner, Croatia in 2023, benefited from some selective data-picking itself when it was allowed to join despite a higher rate.
“The only hurdle for Bulgaria is the inflation criteria,” said Zsolt Darvas, a senior fellow at the Brussels-based economic think tank Bruegel. “It’s in a good budget position — low public debts, budget deficits under control.”
The country’s current forecast of a 2.9 percent inflation rate in 2025 would “imply that Bulgaria might join in 2026,” Darvas said. He added that there is “some room for maneuver” on whether the same gray area which allowed Croatia to join in 2023 could be used to shorten Bulgaria’s accession timeline, but added that it “has to be justified.”
In theory, Sofia would ask for a fresh convergence report from the ECB towards the end of this year, which would have a low enough inflation figure for it to be able to join by mid-year in 2025. But in practice, EU officials who would be involved in the technical process question whether that would be feasible.
Russian disinformation
Among Bulgaria’s political class, eurozone membership is an easy sell. But the public are proving harder to convince.
In a Eurobarometer survey last year, Bulgarians reported lower-than-average support for joining and higher-than-average concerns about issues such as abusive price-setting during the transition.
Senior EU officials told POLITICO that Russian-sponsored disinformation played into this unpopularity.
“I still believe that the majority of the Bulgarians would prefer to be part of the eurozone,” MEP Vitanov said. “I don’t blame here only the Russian propaganda. Yes, it exists. But generally, those who are lagging behind are the Bulgarian politicians.”
Apart from its performance on taming inflation, Bulgaria is in a relatively strong position to join the eurozone, several experts and officials said.
The country’s currency, the lev, has been tied to the euro since 1999, and Bulgaria has been in the EU’s banking union since 2020 ― moves MEP Maydell said showed “a very, very clear commitment” to joining.
Concerns over Bulgaria’s accession timeline haven’t stopped senior EU officials like Donohoe continuing to bang the drum.
The country also saw a nod from eurozone countries last month, when their heads of government praised Bulgaria’s progress.
But despite the EU’s lingering public backing for the January 2025 target, senior officials privately acknowledge that it’s almost certainly not happening.
As one of them put it: “It’s out of the question.”
Source: Politico