SOFIA, Reuters – The government of Bulgaria approved Friday a plan to join Euro Zone as of January 1, 2024. There were worries within the ruling coalition that there was not enough analysis about the potential impact.

After Bulgaria and Croatia were admitted to the ERM-2 Mechanism, which is a requirement for the Euro 2020, political uncertainty and three elections in the last year delayed the development of the plan. [L2N2OC1PM]

The European Union’s least developed member already has its lev currency linked to the euro. It pledges to adopt the single currency at the current fixed rate by 2024.

According to the currency board agreement, “Bulgaria de facto has already adopted the euro.” Assen Vassilev, Finance Minister, stated that the fixed peg meant that if the government wants to increase interest rates we would not be able to do so.

“The plan provides banks and other financial institutions with a timetable for how the euro is to be adopted. “It is just the first technical step,” said he.

The plan was opposed by the Socialists, and ITN party members of the 4-party ruling coalition who are in favor of adoption. The Socialists and ITN party, members of the four-party ruling coalition, said that the central bank had not provided an analysis about how the euro would impact the incomes of people as well as the overall economy.

“We have known since joining the EU, that we would adopt the euro. We will decide when it happens. It is our responsibility to be informed and to reach a reasonable conclusion, and today’s decision does not meet that standard,” Kornelia Niva (Socialist leader, Economy Minister), said.

Vassilev stated that discussions within the parliament are still being held, in which legal changes must be approved.

Bulgaria has yet to demonstrate tangible results against corruption. It may have difficulties meeting nominal criteria to join the Euro zone.

Bulgaria is among the EU’s least-debted members, however, it has suffered fiscal losses of around 3% over the past two years. The increase in food and energy prices, combined with a rise in inflation, have driven annual inflation up to 14.4% for the first time since 2008.