The purpose of this article is to identify the benefits, costs, and risks of Bulgaria’s accession to the Exchange Rate Mechanism II and the European Banking Union. A descriptive approach is applied. The main findings are that there are costs and risks that are not thoroughly discussed or are underestimated implying that the net impact on Bulgaria’s economy is not definitely positive. Identifying the effects of ERM II and European Banking Union participation is a specific task determined by the procedure for euro area accession applied especially for Bulgaria and Croatia. Onthe other hand, Bulgaria has been operating a currency board arrangement for the whole period of existence of the euro with a fixed exchange rate of the lev. A descriptive and comparative analysis is made where effects are qualitatively rather than quantitatively assessed. Three degrees of probability are assigned to risks which are author’s judgement based on the publicly available information