European policy makers are forever debating how best to reform the European Union. But it is usually only when the EU is forced by pressure of events to make decisions that these theoretical debates are resolved and its future shape is determined. One such decision is fast approaching: Should Bulgaria be allowed to join the euro?

The poorest country in the EU, with gross domestic product per capita barely half the EU average, is determined to submit a formal application to enter the Exchange Rate Mechanism, a staging post...