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    Home > Finance > Factbox-Criteria to adopt the euro currency
    Finance

    Factbox-Criteria to adopt the euro currency

    Published by Global Banking & Finance Review®

    Posted on December 16, 2024

    2 min read

    Last updated: January 27, 2026

    An infographic illustrating the criteria for EU nations to adopt the euro currency, highlighting inflation, budget deficit, exchange rate stability, and long-term borrowing costs. This image supports the article on Bulgaria's potential euro adoption in 2026.
    Criteria for EU nations to adopt the euro currency - Global Banking & Finance Review
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    Quick Summary

    Bulgaria may join the euro zone by 2026 if it meets EU criteria in inflation, public finances, exchange rates, and borrowing costs.

    Criteria for EU Nations to Adopt the Euro Currency

    BRUSSELS (Reuters) - Bulgaria might enter the euro zone and become the bloc's 21st member on January 1, 2026, if it receives a green light from the European Commission and the European Central Bank in 2025.

    European Union countries aspiring to adopt the single currency need to fulfill criteria in four areas: inflation, public finances, the exchange rate and long-term borrowing costs.

    INFLATION

    * Inflation in the candidate country needs to be close to that in the three best performing EU members for a period of one year before examination of the country's bid. The upper limit for inflation is calculated as the average of the three best performers, plus 1.5 percentage point.

    DEFICIT/DEBT

    * A country's budget deficit must be below the European Union's limit of 3 percent of gross domestic product (GDP) in a sustainable way.

    EXCHANGE RATE

    * A candidate country's currency must remain relatively stable against the euro over two years, in what is called the Exchange Rate Mechanism (ERM-2). The currency can appreciate, but should not devalue in a significant way.

    LONG-TERM BORROWING COSTS

    * Yields on long-term government bonds issued by the candidate country should not be more than 2 percentage points above the average of the three European Union countries with the lowest inflation, which were used for setting the price stability criterion.

    (Reporting by Jan Strupczewski)

    Key Takeaways

    • •Bulgaria aims to join the euro zone by 2026.
    • •Inflation must align with the EU's best performers.
    • •Budget deficits should be under 3% of GDP.
    • •Currency stability in ERM-2 is required for two years.
    • •Long-term borrowing costs must be controlled.

    Frequently Asked Questions about Factbox-Criteria to adopt the euro currency

    1What is the main topic?

    The article discusses the criteria EU countries must meet to adopt the euro currency, focusing on inflation, public finances, exchange rates, and borrowing costs.

    2What are the inflation criteria?

    Inflation must be close to that of the three best performing EU members, with an upper limit of their average plus 1.5 percentage points.

    3What is ERM-2?

    ERM-2 is the Exchange Rate Mechanism where a candidate country's currency must remain stable against the euro for two years.

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