Bulgaria and Croatia accepted into waiting room to join euro

The two East European nations will also join the bloc’s Banking union

Bulgaria and Croatia have been accepted into Exchange Rate Mechanism II, a precursor to adopting the euro as their currency over the next three years, the European Central Bank said in a statement on Friday, Reuters reported.

The move paves the way for the first enlargement of the Eurozone since 2015, when Lithuania joined the currency bloc as its 19th member.

The central rate of the Bulgarian lev has been set 1.95583 against the euro while the Croatian kuna’s central rate was set at 7.53450, the ECB said.

The two East European nations will also join the bloc’s banking union, putting their biggest lenders under the ECB’s supervision from 1 October, the bank said in a statement.

The two nations must spend at least 2 years in ERM-2 before starting the practical preparations to join the euro, a process that takes roughly another year, making 2023 the earliest year for their membership. During the two years, the two nations need to pursue “sound” economic policies, meet membership criteria and have a stable exchange rate.

 

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