(Bloomberg) — Bulgaria’s finance chief said the government’s bid to join the euro is on course, but may be pushed off by a matter of months as it seeks to meet the criteria for adoption next year.
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Finance Minister Assen Vassilev said the Black Sea nation would request an extraordinary assessment report as soon as it meets its benchmarks — and a start date of March or July next year would also be possible. The 20 members of the euro area have always made the currency swap on Jan. 1.
“We haven’t given up on January 1st, 2025,” Vassilev said in an interview in Sofia. Meeting the start-of-the-year target “is close, it’s very close.”
Bulgaria has grappled with political turmoil, including a succession of fragile coalitions and interim governments, that’s disrupted its efforts to join the single currency. The war in Ukraine and Europe’s energy crisis last year have also foiled plans to meet an inflation target.
Bulgarian governments have consistently advocated joining the euro, arguing for the benefits of boosting living standards and securing a place for the country in the euro area. But fears of higher prices have made the single currency a tough sell, with a majority of Bulgarians maintaining a skeptical view of adoption.
Bulgaria’s currency, the lev, has been pegged to the euro since 1997 as a part of a currency board agreement that helped the country deal with a hyperinflation crisis.
Eurogroup President Paschal Donohoe this month was upbeat about Bulgaria’s prospects of joining the euro in 2025. He said it’s up to the government in Sofia to say whether they wanted to request a further economic evaluation.
“Bulgaria can join in 2025 and all of the work now to meet in particular the inflation test this year is essential to doing that,” Donohoe told reporters Friday in Sofia.
Political turmoil, however, has been the norm. Bulgaria’s two main ruling parties, which last year forged an unlikely alliance in hopes of staunching an ongoing deadlock, are at a standoff over administrative posts and reform plans, which threatens to break a nine-month agreement.
President Rumen Radev gave former Prime Minister Boyko Borissov’s party a week to form a new government, which will determine whether a steady coalition can carry on reforms and the euro effort or head to a new election, the sixth just over two years.
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