Every visitor in Bulgaria asks about the Euro: “Is Bulgaria on the euro?” “Can I use the Euro to pay in shops?” Those familiar with the currency system probe a bit more deeply: “When will Bulgaria switch to the Euro?” Practically speaking, Bulgaria is already tied to the Euro based economy, but maintains its own currency, the Lev, as it prepares to enter the Euro zone. The lev is pegged to the Euro at a fixed exchange rate of 1.95583 leva = 1 euro.
Euro adoption in Bulgaria is a question of when, not if. Timing is linked to meeting five convergence criteria concerning inflation, government debt, government budgetary control, exchange rates, and long term interest rates. The exchange rate criterion requires Bulgaria to join the ERM, or exchange rate mechanism, for a stabilization period of at least two years. Finance Minister Simeon Djankov recently announced Bulgaria’s intention to apply to the ERM early in 2010, with a goal of entry into the Euro zone by 2013.
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