Bulgaria will join the eurozone at the start of next year after clearing a series of economic hurdles, securing approval from the European Central Bank and the European Commission on Wednesday.
"Today's report is a historic moment for Bulgaria, the euro area and the European Union," said EU economy chief Valdis Dombrovskis.
ECB Executive Board Member Philip Lane noted: "I wish to congratulate Bulgaria on its tremendous dedication to making the adjustments needed."
Since it joined the EU in 2007, Bulgaria has been seeking to switch its current currency, the lev, to the euro — although persistent inflation and political unrest have stalled progress.
Last year, Bulgaria's accession to the eurozone was pushed back as the country failed to contain price pressures. These shot up during Europe's energy crisis following Russia's invasion of Ukraine, although annual CPI cooled to 3.5% in April, close to the EU's 3% target.
The ECB and the Commission are now satisfied that economic criteria are fulfilled, notably relating to the public debt and deficit, inflation, interest rates and the exchange rate.
Bulgaria's accession must now be approved by euro area finance ministers, with the final go-ahead expected on 8 July.
Wednesday's breakthrough came after a wave of protests in Bulgaria against the adoption of the euro.
Disinformation campaigns from home and abroad have made certain groups fearful of the change, notably pushing narratives that the euro will worsen poverty and stoke inflation.
Bulgarian President Rumen Radev encouraged the anti-euro voices by proposing earlier this month a referendum on the currency. The proposal was rejected by the pro-European majority in parliament, which accused Radev of acting in favour of Moscow with his last-minute attempt to sabotage the euro adoption.
Countries that have previously joined the eurozone have seen modest inflationary spikes.
Even so, eurozone membership also offers a series of benefits as it can reduce borrowing costs, attract foreign investment, and facilitate cross-border trade. A position in the eurozone would also allow Bulgaria to have a greater say over the ECB's monetary policy trajectory.
Croatia was the last country to join the eurozone in 2023.
