Bulgaria can join the Eurozone in 2022 if the country gets the green light to enter the Exchange Rate Mechanism (ERM2) later this year, European Commission Vice President Valdis Dombrovskis told public radio BNR on January 8.
The country applied for membership in ERM2 and the European banking union and hopes to get a green light in July 2019. The country meets the nominal criteria to adopt the European common currency, with its currency, the Bulgarian lev, pegged to the euro, low inflation and healthy public finances. However, the EU has demanded that Bulgaria also check its banking system due to suspicions that some locally-owned banks are not stable enough.
It is seen as “a kind of guinea pig,” according to an official quoted by Reuters earlier in July, as Brussels is seeking to set up a pattern for all future candidates for the Eurozone.
Dombrovskis said that, in order to be accepted in ERM2, Bulgaria’s application should be approved by all EU member states and by the European Central Bank (ECB).
The ECB has already started a comprehensive analysis of six Bulgarian banks as part of the procedure for the country’s entry to the banking union. The analysis will include the three biggest banks in the country in terms of assets and three other domestically-owned banks. The test results will be announced in July 2019.