Not everyone welcomes Bulgaria’s decision to adopt the Euro

Sofia: “We did it!” Bulgarian Prime Minister Rossen Jeliazkov posted triumphantly on X. “We thank all institutions, partners and everyone whose efforts made this landmark moment possible. The government remains committed to a smooth and effective transition to the euro in the interest of all citizens.” By adopting the single European currency, the euro, on January 1, 2026, Bulgaria will become the eurozone’s 21st member state. But with the country still largely divided over the decision, it may take time to convince ordinary Bulgarians of the economic merits of euro adoption.

Having joined the European Union (EU) on January 1, 2007, and with its local currency, the lev, having been included in the European Exchange Rate Mechanism II (ERM II) since July 10, 2020, Bulgaria has been pushing to gain more European integration. This was observed when Bulgaria became a full member of the Schengen Area, allowing its people to move freely across certain European borders. Euro adoption has required the country to meet the official economic convergence criteria for entry into the eurozone, as confirmed by an ECB “Convergence Report” published on June 4.

The assessment, which the Bulgarian government requested in February, found that Bulgaria had met the criteria’s reference values and complied with the legal requirements. “This positive assessment of convergence paves the way for Bulgaria to introduce the euro as of 1 January 2026 and become the 21st EU Member State to join the euro area,” said Philip R. Lane, a member of the ECB’s Executive Board. “I wish to congratulate Bulgaria on its tremendous dedication to making the adjustments needed.”

The Council of the European Union formally approved Bulgaria’s accession to the euro on July 8, confirming a conversion rate for the outgoing lev of 1.95583 per euro—the then current rate on the Exchange Rate Mechanism II, on which the local currency has been pegged to the euro since 1999—thereby minimising any undue currency volatility after adoption. The ECB and Bulgarian National Bank (BNB) agreed to monitor developments in the lev’s movements against the euro until January 1, 2026.

The European community’s leadership has been gushing in praise for Bulgaria’s landmark decision. “We are delighted to welcome you,” stated European Central Bank President Christine Lagarde. “The euro will strengthen Bulgaria’s economy and bring big benefits for Bulgarian people and businesses,” the European Commission’s (EC) head, Ursula von der Leyen, posted on X, while European Commissioner for Economy and Productivity Valdis Dombrovskis also posted an optimistic message. “Joining the euro area is much more than just about replacing lev with euro. It is about building a brighter and more prosperous future for Bulgaria and its citizens at the heart of Europe.”

Many of those “citizens” are sceptical about Bulgaria’s post-euro fortunes, with a sizeable share of the country’s 6.7 million-strong population unconvinced that its economic prospects will improve within the eurozone.

Truth be told, however, many of those “citizens” are sceptical about Bulgaria’s post-euro fortunes, with a sizeable share of the country’s 6.7 million-strong population unconvinced that its economic prospects will improve within the eurozone. Widespread fears linger over the potential inflationary impact on Bulgaria’s economy—and resulting erosion in purchasing power—of euro area membership. Although Bulgaria satisfied the official convergence criteria of its annual inflation rate being brought below the 2.8-percent benchmark (or a maximum of 1.5 percent higher than the average inflation rates of the three lowest eurozone members), producer prices have risen over the last month.

With the capital city, Sofia, set to experience the bulk of the upside in this new economic environment, many are left wondering how the rest of the country will fare. “The EU has channelled €16.3 billion into Bulgaria since the country joined [the] EU, particularly for infrastructure development. However, a year of fieldwork has shown me that Sofia has been the main benefactor of this investment,” Yuxiang Lin, a doctoral researcher at the Centre for Russian, European and Eurasian Studies, University of Birmingham, explained in a June 13 piece for The Conversation. “Small municipalities and rural communities have not felt the benefit as clearly. Among the €16.3 billion, Sofia received €3.1 billion and Plovdiv received €0.8 billion.”

Bulgaria’s business community has similarly voiced its concerns over potentially declining economic prosperity and rising inequality post-eurozone membership. “No shop owner is an economist,” Nikolay Terziev, the owner of an organic store in the southern Bulgarian city of Haskovo, explained to Euronews in mid-July. “What worries us is the information we’re getting from close acquaintances in countries that have already adopted the euro—yes, economic indicators improve, but the population becomes poorer. But more big businesses profit.”

Are such concerns widespread? Polls would suggest so. A survey published on June 13, commissioned by Bulgaria’s Ministry of Finance, showed that 46.8 percent of citizens opposed the single European currency, while 46.5 percent favoured it. The remaining 6.7 percent were undecided. A telephone survey conducted in January by the sociological agency Measure found that, in addition to more than 57 percent of those surveyed being fundamentally “against” Bulgaria’s eurozone membership, 30 percent did want the euro but preferred adoption to occur at a later date. Just one-quarter of respondents were “in favour” of Bulgaria entering the eurozone in 2026, while 40 percent wanted the euro to “never” be adopted.

Dismay lingers among many Bulgarians who feel that the euro adoption was achieved through undemocratic means. President Rumen Radev proposed in May that a referendum be held regarding the move and that euro adoption “must take place with a strong national consensus—through the inner conviction of the people, not through dismissive disregard for their will”. However, this proposal was dismissed by the speaker of the Bulgarian parliament, who labelled Radev’s efforts an attempt to derail the process of European integration.

The issue became highly politicised in the months leading up to the adoption of the European single currency, with several minority parties in Bulgaria’s parliament, the National Assembly, upping their campaigns against euro adoption. The most successful of these parties, Vazrazhdane (Revival), has grown considerably in popularity. Thousands have taken to the streets of Bulgaria’s capital, Sofia, and other Bulgarian cities to protest the euro’s adoption, with demonstrations spilling over into violent clashes between protestors and the police.

In response, Minister of Finance Temenuzhka Petkova told private broadcaster bTV in early June that “people should feel reassured” and that “there is no country that has joined the eurozone and seen a decline in living standards”. The finance minister added that the government would step in to prevent speculative price hikes. “Inspections are already underway in 30 Bulgarian cities across more than 130 retail outlets,” Petkova confirmed. “The goal is to capture a snapshot of current price levels, and the same outlets will be re-inspected to track any unjustified increases.”

Bulgaria’s minister of economy and industry, Peter Dilov, has sought to allay public concerns. “Bulgaria could have saved 195 million euros per year if it had joined the eurozone earlier. Small and medium-sized enterprises are fully prepared and clearly understand the benefits of the country’s accession. They are among the biggest beneficiaries. We are managing to save them nearly 1 billion leva in currency conversion costs.”

Many regard Bulgaria’s possible loss of sovereignty and subjugation to European powers as key factors in their oppositional stances to euro adoption. The BNB’s governor, Dimitar Radev, has insisted that the benefits of eurozone membership will be substantial and long-term, especially as Bulgaria has not had an independent monetary policy since the Bulgarian currency board was established in 1997.

“As a member of the ECB Governing Council, the Governor of the BNB will have an equal institutional status with the other governors of the euro area central banks. Despite the system of rotating voting rights, all governors take part in the discussions and contribute to the formation of the collective expertise and decisions of the Council,” Radev said in a Manager Magazin interview. “In this context, it is not about losing sovereignty, but about moving to a new, higher level of participation in the European monetary architecture. Bulgaria will have an institutional voice in a process whose results have even hitherto had a direct impact on the national economy, but until now without the Bank participating in the formulation and making of decisions.”

After August 8, retail prices must be displayed in leva and euros, while banks have until the end of 2026 to exchange their leva for euros. The BNB will exchange banknotes and coins from leva to euros for an undisclosed period.