EU backs Bulgaria's first step towards joining euro

BRUSSELS (Reuters) - Euro zone finance ministers backed on Thursday Bulgaria’s bid to join the banking union, a move that precedes the country’s membership of the euro, they said in a statement.

Bulgaria is expected to apply to join the banking union, and has committed to adapting its banking and legal system to join the bloc’s flagship project to enhance financial stability of its banks.

The European Central Bank will conclude an assessment “within approximately one year after Bulgaria’s formal application” to join the banking, the statement said. After this assessment, Bulgaria could join the bloc’s ERM-2 exchange rate mechanism - a waiting room of at least two years that precedes euro membership.

Reporting by Francesco Guarascio; editing by Philip Blenkinsop