Bulgaria officially adopted the euro on , becoming the 21st member of the eurozone and ending nearly 140 years of the lev as its national currency. The move, long anticipated, represents a significant step towards deeper economic integration with the European Union, but has been met with a mix of optimism and anxiety among the country’s 6.4 million citizens.
The transition, which began with a fixed conversion rate established prior to , saw approximately 75 percent of leva removed from circulation and replaced with roughly €6.1 billion (approximately $7.2 billion) as of . Around €4 billion worth of leva remained in circulation, according to Bulgaria’s national bank.
While the changeover was approved by the Council of the European Union in , following confirmation from the European Commission and the European Central Bank (ECB) that Bulgaria had met all five convergence criteria, the path to euro adoption has been lengthy, and complex. Bulgaria initially applied to join the eurozone in , but faced repeated delays due to challenges in meeting the required economic standards. Initial targets for entry in were pushed back due to inflation concerns, with the ECB confirming in that Bulgaria had not yet met inflation requirements.
The breakthrough came in , when the Bulgarian government requested an off-cycle convergence assessment after determining inflation had fallen to acceptable levels. The adoption of the euro is seen by many as the “final step” in Bulgaria’s EU integration, as stated by President Rumen Radev.
The shift to the euro is expected to eliminate currency conversion costs for companies trading with other eurozone members and potentially boost tourism. Economists anticipate that the fixed exchange rate of approximately two leva to one euro should prevent dramatic price swings or spikes in inflation. However, concerns remain among some Bulgarians that consumer prices could rise, at least temporarily, as is common during currency transitions.
Despite these concerns, the transition appears to have been relatively smooth. The Bulgarian Euro Coordination Center reported that of approximately 6,000 spot checks conducted nationwide to ensure compliance, only 8 percent revealed violations, primarily among small retailers and businesses in rural areas. Repeat offenders face fines of up to €100,000.
The mood among citizens has been mixed. Some, like Aneta Petelkova, 79, expressed a sense of melancholy over parting with the lev, a symbol of Bulgarian history. Others, such as Nikolay Bagdatov, 23, focused on the potential economic benefits, hoping for a more stable financial future. Veselka Deneva, a honey producer, voiced opposition, fearing that prices would increase.
Businesses are also adjusting. Velimir Bachev, co-owner of the Coffee Syndicate cafe in Sofia, noted the initial challenges of having sufficient euro currency to provide change, and instances of customers attempting to use the cafe as a currency exchange. Retailers are required to display prices in both leva and euro until to prevent businesses from rounding up prices.
While some initial glitches were reported, such as difficulties exchanging older euro banknotes, the overall impact on inflation in was relatively modest, at 0.7 percent, a slower rate than the same period the previous year. According to Petar Ganev, a senior researcher with the Institute for Market Economics, public opposition may be more related to the timing of the changeover than the change itself.
Bulgaria’s adoption of the euro comes at a politically sensitive time. The country recently saw the resignation of its prime minister following accusations of corruption and public resistance to tax increases, and elections have not yet been scheduled. Despite this instability, the move to the euro represents a significant milestone in Bulgaria’s economic and political alignment with the European Union.
