FRANKFURT: Bulgaria and Croatia have been accepted into ERM-2 mechanism, a mandatory waiting room for joining the euro, kicking off the currency bloc's first expansion in half a decade, the European Central Bank said on Friday.

Getting a nod from euro zone finance ministers and ECB officials, the two East European nations will also join the bloc's banking union, putting their biggest lenders under the ECB's supervision from Oct. 1, the bank said in a statement.

The two nations must spend at least 2 years in ERM-2 before starting the practical preparations to join the euro, a process that takes roughly another year, making 2023 the earliest year for their membership.