From Yahoo Finance: 2025-06-04 08:10:00

European Union officials approved Bulgaria to join the euro currency union, becoming the 21st member on Jan. 1. Criteria for joining the euro include low inflation, controlled deficits and debt, stable exchange rate, and a two-year waiting room period. Bulgaria met requirements, including low debt levels and progress in corruption and money laundering.

The euro, launched in 1999, is a shared currency among EU countries. The European Central Bank sets monetary policy and interest rate benchmarks, similar to the U.S. Federal Reserve. Countries must meet criteria to join, including low inflation, controlled deficits, and stable exchange rates with the euro.

Bulgaria, with only 24.1% debt to GDP ratio, pegged its currency to the euro in 1999. Concerns about corruption and money laundering were addressed by the EU commission and ECB. A Eurobarometer poll showed 50% of Bulgarians opposed the euro due to inflation fears, distrust of institutions, and social media misinformation.

Benefits of euro membership include lower interest rates, simplified cross-border trade, and a voice in eurozone monetary policy. Disadvantages include loss of control over interest rates and government spending. Memories of the eurozone crisis from 2010-2015 still linger, with countries like Greece facing austerity measures and bailouts.

ECB President Mario Draghi’s pledge to save the euro in 2012 helped stabilize the currency. Backstops were added, including a bailout fund and ECB banking oversight. Not all EU members use the euro; countries like Denmark have opt-outs, while others like Poland show little interest in joining despite economic growth.

Read more: The euro is about to get a new member, Bulgaria. What’s the eurozone and how do countries join?