Categories: Forex News

Factbox-Standards to undertake the euro foreign money


BRUSSELS (Reuters) – Bulgaria may enter the euro zone and change into the bloc’s twenty first member on January 1, 2026, if it receives a inexperienced mild from the European Fee and the European Central Financial institution in 2025.

European Union international locations aspiring to undertake the one foreign money want to satisfy standards in 4 areas: inflation, public funds, the trade charge and long-term borrowing prices.

INFLATION

* Inflation within the candidate nation must be near that within the three finest performing EU members for a interval of 1 yr earlier than examination of the nation’s bid. The higher restrict for inflation is calculated as the common of the three finest performers, plus 1.5 share level.

DEFICIT/DEBT

* A rustic’s funds deficit have to be under the European Union’s restrict of three % of gross home product (GDP) in a sustainable means.

EXCHANGE RATE

* A candidate nation’s foreign money should stay comparatively steady towards the euro over two years, in what is named the Trade Fee Mechanism (ERM-2). The foreign money can respect, however shouldn’t devalue in a big means.

LONG-TERM BORROWING COSTS

* Yields on long-term authorities bonds issued by the candidate nation shouldn’t be greater than 2 share factors above the common of the three European Union international locations with the bottom inflation, which had been used for setting the worth stability criterion.

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