The euro is about to get a new member. What does that mean?
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Bulgaria given green light to adopt the euro currency
- The European Union has approved Bulgaria's entry into the Eurozone, which will make it the 21st member to adopt the euro currency.
- Effective January 1, Bulgaria will replace its national currency, the lev, with the euro, a move aimed at strengthening connections within the EU.
- To join the Eurozone, countries must meet criteria including low inflation, controlled deficits and debt, low long-term interest rates, and a stable exchange rate; Bulgaria has met these requirements after a review by the European Commission and the ECB.
- While 50 per cent of Bulgarians initially opposed the euro due to fears of inflation and distrust of institutions, the transition is expected to lower interest rates, ease cross-border trade, and give Bulgaria a voice in eurozone monetary policy.
- Despite concerns about corruption, the EU determined Bulgaria has made sufficient progress, paving the way for the currency switch, with lev notes exchangeable at banks for a limited time and indefinitely at the Bulgarian National Bank.