Bulgaria and Croatia took a big step toward adopting the euro currency, potentially becoming the newest members to the bloc after years of economic crises and shocks.
The European Central Bank announced that Bulgaria and Croatia entered into the revised Exchange Rate Mechanism, known as ERM II, after completing a series of preconditions to strengthen the economy and banking industry.
Croatia and Bulgaria are set for approval to join the waiting room to adopt the euro in what would be the first step toward expanding the currency union since 2015.
The decision to allow the two eastern European countries into what’s known as ERM-2 is was taken by euro-region finance ministers meeting Thursday and Friday.
The move underscores the currency’s continued allure, despite the debt crisis that followed 2008’s global financial collapse and repeated predictions of the bloc’s demise. Switching to the euro, which remains second only to the U.S. dollar as a global reserve currency, is seen in the continent’s east as a means of boosting investment and, in some cases, drawing a line under the region’s communist past.
The last country to make the change was Lithuania five years ago. The other four existing eastern members are Estonia, Latvia, Slovakia and Slovenia.
WSJ / POLITICO / Bloomberg