Proposal for a COUNCIL DECISION on the adoption by Bulgaria of the euro on 1 January 2026
Date: 2025-06-04
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Bulgaria, EMS exchange-rate mechanism, Economic and Monetary Union, Euro Group (euro area), economic convergence, euro

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   EUROPEAN COMMISSION  Brussels, 4.6.2025  COM(2025) 304 final/2         Downgraded on 4.6.2025 2025/0158 (NLE)  Proposal for a COUNCIL DECISION on the adoption by Bulgaria of the euro on 1 January 2026  
 
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL  

On  3 May  1998,  the  Council  decided  that  Belgium,  Germany,  Spain,  France,  Ireland,  Italy, 
Luxembourg, the Netherlands, Portugal, Austria and Finland fulfilled the necessary conditions 
to adopt the euro on 1 January 1999. Denmark and the United Kingdom made use of their opt-
out  clauses  and  were  therefore  not  assessed  by  the  Council.  Greece  and  Sweden  were 
considered by the Council as Member States with a derogation. 

On 19 June 2000, the Council decided that Greece fulfilled the necessary conditions to adopt 
the  euro  on  1 January  2001.  The  countries  that  joined  the  European  Union  on  1 May  2004 
(Czechia, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia) 
became Member States with a derogation in accordance with Article 4 of the respective Act of 
Accession. 

On 11 July 2006, the Council decided that Slovenia fulfilled the necessary conditions to adopt 
the euro on 1 January 2007. 

Bulgaria  and  Romania  joined  the  European  Union  on  1 January  2007  and  became  Member 
States with a derogation in accordance with Article 5 of the respective Act of Accession. 

On 10 July 2007, the Council decided that Cyprus and Malta fulfilled the necessary conditions 
to adopt the euro on 1 January 2008. 

On 8 July 2008, the Council decided that Slovakia fulfilled the necessary conditions to adopt 
the euro on 1 January 2009. 

On 13 July 2010, the Council decided that Estonia fulfilled the necessary conditions to adopt 
the euro on 1 January 2011. 

On 9 July 2013, the Council decided that Latvia fulfilled the necessary conditions to adopt the 
euro on 1 January 2014. 

On  23 July  2014,  the  Council  decided  that  Lithuania  fulfilled  the  necessary  conditions  to 
adopt the euro on 1 January 2015. 

On 12 July 2022, the Council decided that Croatia fulfilled the necessary conditions to adopt 
the euro on 1 January 2023. 

Article 140(1)  of  the  Treaty  on  the  Functioning  of  the  European  Union  (‘the  TFEU’)  states 
that at least once every two years or at the request of a Member State with a derogation, the 
Commission  and  the  European  Central  Bank  (ECB)  have  to  report  to  the  Council  on  the 
progress  made by Member States with  a derogation  in  fulfilling  their obligations  to  achieve 
economic and monetary union. 

Based on its own report and that of the ECB, the Commission should submit to the Council a 
proposal for a Council decision, in accordance with the procedure laid down in Article 140(2) 
of  the  TFEU,  to  abrogate  the  derogation  of  the  Member  States  fulfilling  the  necessary 
conditions. 

Both the Commission and the ECB  convergence  reports were released on 4 June 2025. The 
reports  include  an  examination  of  the  compatibility  between  Bulgaria’s  national  legislation, 
including the statutes of its national central bank, with Articles 130 and 131 of the TFEU and 
the Statute of the European System of Central Banks and of the ECB. 

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The  reports  also  examine  whether  a  high  degree  of  sustainable  convergence  has  been 
achieved, by referring the fulfilment of the convergence criteria, and take account of several 
other factors required under the final subparagraph of Article 140(1) of the TFEU. 

In its  convergence  report,  the Commission  concludes that  Bulgaria fulfils the conditions  for 
adopting the euro. 

In  its  convergence  report,  the  ECB  has  not  identified  any  obstacle  to  abrogating  the 
derogation concerning Bulgaria.  

On  the  basis  of  its  report  and  that  of  the  ECB,  the  Commission  has  adopted  the  attached 
proposal  for  a  Council  decision  to  abrogate  the  derogation  of  Bulgaria,  with  effect  from 
1 January 2026. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENT 

Discussions  with  Member  States  on  the  economic  policy  challenges  in  Member  States  are 
regularly held under various headings in the Economic and Financial Committee (EFC) and 
the ECOFIN/Eurogroup. These include informal discussions on issues specifically relevant to 
preparing for eventual entry in the euro area (including exchange rate policies). 

Economic  developments  in  the  euro  area  and  the  Member  States  are  assessed  through  the 
various  procedures  of  economic  policy  coordination  and  surveillance  (specifically  under 
Article 121  TFEU),  and  as  part  of  the  Commission’s  regular  monitoring  and  analysis  of 
country-specific and area-wide developments (including forecasts, regular publication series, 
and input to the EFC and ECOFIN/Eurogroup). In line with the proportionality principle and 
with past practice, no formal impact assessment has been carried out. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

Legal basis 

The legal basis for this proposal is Article 140(2) TFEU, which provides for the procedure for 
a Council decision on euro adoption and for abrogating the derogation in the Member States 
concerned. 

The  Council  shall  act  on  a  proposal  from  the  Commission,  after  consulting  the  European 
Parliament,  after  discussion  in  the  European  Council  and  after  having  received  a 
recommendation  of  a  qualified  majority  of  those  among  its  members  representing  Member 
States whose currency is the euro. 

3.2. 

Subsidiarity and proportionality 

The proposal  falls  under the exclusive competence of the Union. Therefore, the subsidiarity 
principle does not apply. 

This  initiative  does  not  go  beyond  what  is  needed  to  achieve  its  objective  and,  therefore, 
complies with the proportionality principle. 

3.3. 

Choice of legal instrument 

In accordance with Article 140(2) TFEU, a decision is the appropriate legal instrument. 

4. 

BUDGETARY IMPLICATION 

The proposal has no implications for the budget of the Union. 

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2025/0158 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the adoption by Bulgaria of the euro on 1 January 2026 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 140(2) thereof, 

Having regard to the proposal from the European Commission, 
Having regard to the report from the European Commission (1) 
Having regard to the report from the European Central Bank (2) 
Having regard to the opinion of the European Parliament (3), 

Having regard to the discussion in the European Council, 

Having  regard  to  the  recommendation  of  the  members  of  the  Council  representing  Member 
States whose currency is the euro (4), 

Whereas: 

(1) 

(2) 

(1) 
(2) 
(3) 
(4) 
(5) 

(6) 

(7) 

(8) 

(9) 

The third stage of economic and monetary union (‘EMU’) started on 1 January 1999. 
The Council, meeting in Brussels on 3 May 1998 in the composition of Heads of State 
or  Government,  decided  that  Belgium,  Germany,  Spain,  France,  Ireland,  Italy, 
Luxembourg,  the  Netherlands,  Austria,  Portugal  and  Finland  fulfilled  the  necessary 
conditions for adopting the euro on 1 January 1999 (5). 
By Decision 2000/427/EC (6), the Council decided that Greece fulfilled the necessary 
conditions for adopting the euro on 1 January 2001. By Decision 2006/495/EC (7), the 
Council decided that Slovenia fulfilled the necessary conditions for adopting the euro 
on 1 January 2007. By  Decisions 2007/503/EC (8) and 2007/504/EC (9), the Council 
decided that Cyprus and Malta fulfilled the necessary conditions for adopting the euro 

Report of [……] (not yet published in the Official Journal). 
Report of [………] (not yet published in the Official Journal). 
Opinion of [……] (not yet published in the Official Journal). 
OJ C […], [….] […]  
Council Decision 98/317/EC of 3 May 1998 in accordance with Article 109j(4) of the Treaty (OJ L 139, 
11.5.1998, p. 30). 
Council Decision 2000/427/EC of 19 June 2000 in accordance with Article 122(2) of the Treaty on the 
adoption by Greece of the single currency on 1 January 2001 (OJ L 167, 7.7.2000, p. 19). 
Council Decision 2006/495/EC of 11 July 2006 in accordance with Article 122(2) of the Treaty on the 
adoption by Slovenia of the single currency on 1 January 2007 (OJ L 195, 15.7.2006, p. 25). 
Council Decision 2007/503/EC of 10 July 2007 in accordance with Article 122(2) of the Treaty on the 
adoption by Cyprus of the single currency on 1 January 2008 (OJ L 186, 18.7.2007, p. 29). 
Council Decision 2007/504/EC of 10 July 2007 in accordance with Article 122(2) of the Treaty on the 
adoption by Malta of the single currency on 1 January 2008 (OJ L 186, 18.7.2007, p. 32). 

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on 1 January 2008. By Decision 2008/608/EC (10), the Council decided that Slovakia 
fulfilled  the  necessary  conditions  for  adopting  the  euro.  By  Decision  2010/416/EU 
(11),  the  Council  decided  that  Estonia  fulfilled  the  necessary  conditions  for  adopting 
the euro. By Decision 2013/387/EU (12), the Council decided that Latvia fulfilled the 
necessary conditions for adopting the euro. By Decision 2014/509/EU (13), the Council 
decided that Lithuania fulfilled the necessary conditions for adopting the euro. Finally, 
by  Decision  2022/1211/EU  (14),  the  Council  decided  that  Croatia  fulfilled  the 
necessary conditions for adopting the euro.  

(3)  

In  accordance  with  point  1  of  Protocol  No  16  on  certain  provisions  relating  to 
Denmark  annexed  to  the  Treaty  establishing  the  European  Community  and  with  the 
Decision taken by the Heads of State or Government in Edinburgh in December 1992, 
Denmark has notified the Council that it will not participate in the third stage of EMU. 
Denmark  has  not  requested  that  the  procedure  referred  to  in  Article  140(2)  of  the 
Treaty on the Functioning of the European Union (TFEU) be initiated. 

(4)   By virtue of Decision 98/317/EC, Sweden is a Member State with a derogation within 
the meaning of Article 139(1) TFEU. In accordance with Article 4 of the 2003 Act of 
Accession  (15),  Czechia,  Hungary  and  Poland  are  Member  States  with  a  derogation 
within the meaning of Article 139(1) TFEU. In accordance with Article 5 of the 2005 
Act  of  Accession  (16),  Bulgaria  and  Romania  are  Member  States  with  a  derogation 
within the meaning of Article 139(1) TFEU. 

(5) 

The  European  Central  Bank  (‘ECB’)  was  established  on  1 July  1998.  The  European 
Monetary System has been replaced by an exchange rate mechanism, the setting-up of 
which was agreed by the Resolution of the European Council on the establishment of 
an  exchange  rate  mechanism  in  the  third  stage  of  economic  and  monetary  union  of 
16 June  1997  (17).  The  procedures  for  an  exchange  rate  mechanism  in  stage  three  of 
economic  and  monetary  union  (ERM  II)  were  laid  down  in  the  Agreement  of 
16 March 2006 between the ECB and the national central banks of the Member States 
outside  the  euro  area  laying  down  the  operating  procedures  for  an  exchange  rate 
mechanism in stage three of economic and monetary union (18). 

(6) 

Article 140(2) TFEU lays down the procedures for abrogating the derogations of the 
Member  States  concerned.  At  least  once  every  two  years,  or  at  the  request  of  a 
Member  State  with  a  derogation,  the  Commission  and  the  ECB  are  to  report  to  the 
Council in accordance with the procedure laid down in Article 140(1) TFEU.  

(7) 

National  legislation  in  the  Member  States,  including  the  statutes  of  national  central 
banks,  is  to  be  adapted  as  necessary  with  a  view  to  ensuring  compatibility  with 

(10) 

(11) 

(12) 

(13) 

(14) 

(15) 
(16) 
(17) 
(18) 

Council Decision 2008/608/EC of 8 July 2008 in accordance with Article 122(2) of the Treaty on the 
adoption by Slovakia of the single currency on 1 January 2009 (OJ L 195, 24.7.2008, p. 24). 
Council Decision 2010/416/EU of 13 July 2010 in accordance with Article 140(2) of the Treaty on the 
adoption by Estonia of the euro on 1 January 2011 (OJ L 196, 28.7.2010, p. 24). 
Council Decision 2013/387/EU of 9 July 2013 on the adoption by Latvia of the euro on 1 January 2014 
(OJ L 195, 18.7.2013, p. 24). 
Council Decision 2014/509/EU of 23 July 2014 on the adoption by Lithuania of the euro on 1 January 
2015 (OJ L 228, 31.7.2014, p. 29). 
Council Decision 2022/1211/EU of 12 July 2022 on the adoption by Croatia of the euro on 1 January 
2023 (OJ L 187, 14.7.2022, p. 31). 
OJ L 236, 23.9.2003, p. 33. 
OJ L 157, 21.6.2005, p. 203. 
OJ C 236, 2.8.1997, p. 5. 
OJ C 73, 25.3.2006, p. 21. 

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(8) 

(9) 

(10) 

Articles 130 and 131  TFEU and with  the Statute of the European System  of Central 
Banks and of the European Central Bank (‘Statute of the ESCB and of the ECB’). The 
reports  of  the  Commission  and  the  ECB  provide  a  detailed  assessment  of  the 
compatibility of the legislation of Bulgaria with Articles 130 and 131 TFEU and with 
the Statute of the ESCB and of the ECB. 

In accordance with Article 1 of Protocol No 13 on the convergence criteria annexed to 
the  TFEU,  the  criterion  on  price  stability  referred  to  in  the  first  indent  of 
Article 140(1)  TFEU  means  that  a  Member  State  has  a  price  performance  that  is 
sustainable and an average rate of inflation, observed over a period of one year before 
the examination, that does not exceed by more than one and a half percentage points 
that of,  at  most, the three best-performing Member States in terms  of price stability. 
For  the  purpose  of  the  criterion  on  price  stability,  inflation  is  measured  by  the 
harmonised indices of consumer prices (HICPs) defined in Regulation (EU) 2016/792 
of  the  European  Parliament  and  of  the  Council  (19).  To  assess  the  price  stability 
criterion,  a  Member  State’s  inflation  is  measured  by  the  percentage  change  in  the 
arithmetic  average  of  12  monthly  indices,  relative  to  the  arithmetic  average  of  12 
monthly indices from the previous period. A reference value calculated as the simple 
arithmetic average of the inflation rates of the three best-performing Member States in 
terms  of  price  stability,  plus  1.5 percentage  points,  was  used  in  the  reports  of  the 
Commission and the ECB. In the one-year period ending in April 2025, the inflation 
reference value was calculated to be 2.8%, with Ireland, Finland and Italy as the three 
best-performing Member States in terms of price stability, with inflation rates of 1.2%, 
1.3%, and 1.4%, respectively. 

In  accordance  with  Article 2  of  Protocol  No 13,  the  criterion  on  the  government 
budgetary  position  referred  to  in  the  second  indent  of  Article 140(1)  TFEU  requires 
that, at the time of the examination, the Member State not be the subject of a Council 
decision under Article 126(6) TFEU that an excessive deficit exists. 

In  accordance  with  Article 3  of  Protocol  No 13,  the  criterion  on  participation  in  the 
exchange-rate  mechanism  of  the  European  Monetary  System  referred  to  in  the  third 
indent of Article 140(1) TFEU requires a Member State to have respected the normal 
fluctuation  margins  provided  for  by  the  exchange  rate  mechanism  (ERM)  of  the 
European  Monetary  System,  without  severe  tensions,  for  at  least  the  last  two  years 
before  the  examination.  In  particular,  the  Member  State  must  not  have  devalued  its 
currency’s  bilateral  central  rate  against  the  euro  on  its  own  initiative  for  the  same 
period.  Since  1 January  1999,  the  ERM  II  provides  the  framework  for  assessing  the 
fulfilment of the exchange rate criterion. In assessing the fulfilment of this criterion in 
their reports, the Commission and the ECB have examined the two-year period ending 
on 19 May 2025. 

(11) 

In  accordance  with  Article 4  of  Protocol  No 13,  the  criterion  on  the  convergence  of 
interest  rates  referred  to  in  the  fourth  indent  of  Article 140(1)  TFEU  means  that, 
observed over a period of one year before the examination, a Member State has had an 
average  nominal  long-term  interest  rate  that  does  not  exceed  by  more  than  two 
percentage points that of, at most, the three best-performing Member States in terms of 
price  stability.  The  criterion  used  to  assess  the  convergence  of  interest  rates  was 

(19) 

Regulation  (EU)  2016/792  of  the  European  Parliament  and  of  the  Council  of  11 May  2016  on 
harmonised  indices  of  consumer  prices  and  the  house  price  index,  and  repealing  Council  Regulation 
(EC) No 2494/95 (OJ L 135, 24.5.2016, p. 11). 

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comparable  interest  rates  on  ten-year  benchmark  government  bonds.  To  assess  the 
fulfilment  of  the  interest-rate  criterion,  a  reference  value  calculated  as  the  simple 
arithmetic average of the nominal long-term interest rates of the three best-performing 
Member States in terms of price stability, plus two percentage points, was considered 
in  the  reports  of  the  Commission  and  the  ECB.  The  reference  value  is  based  on  the 
long-term interest rates in Ireland (2.8%), Finland (2.9%) and Italy (3.7%), and in the 
12-month period ending in April 2025 it was 5.1%. 

(12) 

In  accordance  with  Article 5  of  Protocol  No 13,  the  data  used  in  assessing  the 
fulfilment  of  the  convergence  criteria  was  provided  by  the  Commission.  Budgetary 
data  were  provided  by  the  Commission  after  reporting  by  the  Member  States  before 
1 April 2025, in accordance with Council Regulation (EC) No 479/2009 (20). 

(13)  On  the  basis  of  reports  presented  by  the  Commission  and  the  ECB  on  the  progress 
made by Bulgaria in fulfilling its obligations regarding the achievement of economic 
and monetary union, it is concluded that in Bulgaria, national legislation, including the 
Statute  of  the  national  central  bank,  is  compatible  with  Articles  130  and  131  TFEU 
and with the Statute of the ESCB and of the ECB. 

(14)   On  the  basis  of  reports  presented  by  the  Commission  and  the  ECB  on  the  progress 
made by Bulgaria in fulfilling its obligations regarding the achievement of economic 
and monetary union, it is concluded that, regarding the fulfilment by Bulgaria of the 
convergence  criteria  mentioned  in  the  four  indents  of  Article 140(1)  TFEU:  the 
average inflation rate in Bulgaria in the 12-month period ending in April 2025 stood at 
2.7%, which is below the reference value, and a review of a broad range of indicators 
does  not  identify  causes  for  concern  regarding  the  sustainability  of  price  stability; 
Bulgaria  is  not  the  subject  of  a  Council  decision  on  the  existence  of  an  excessive 
deficit; Bulgaria has been a member of ERM II since 10 July 2020 and during the two 
years preceding the assessment, the lev (BGN) exchange rate has not been subject to 
severe tensions  and  Bulgaria has  not  devalued the  BGN bilateral  central  rate against 
the euro on its own initiative. Finally, in the 12-month period ending in April 2025, the 
long-term  interest  rate  in  Bulgaria  was,  on  average,  3.9%,  which  is  well  below  the 
reference value. 

(15)  

In  the  light  of  the  assessment  on  legal  compatibility  and  on  the  fulfilment  of  the 
convergence criteria as well as the assessment of additional factors, Bulgaria fulfils the 
necessary conditions for the adoption of the euro, 

HAS ADOPTED THIS DECISION:  

Article 1 

Bulgaria fulfils the necessary conditions for the adoption of the euro. The derogation referred 
to in Article 5 of the 2005 Act of Accession is abrogated with effect from 1 January 2026. 

(20) 

Council  Regulation  (EC)  No 479/2009  of  25 May  2009  on  the  application  of  the  Protocol  on  the 
excessive  deficit  procedure  annexed  to  the  Treaty  establishing  the  European  Community  (OJ  L  145, 
10.6.2009, p. 1). 

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This Decision is addressed to the Member States. 

Done at Brussels, 

Article 2 

For the Council 
The President 

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