The Controversies Behind Bulgaria’s Adoption of the Euro

Bulgaria is officially set to adopt the euro on January 1, 2026. This is a historical event for the country, and the debate surrounding the decision has been heated.

For more than a decade, there have been talks in Bulgaria about the Eurozone and whether the country is finally ready to join it. The two opposing sides – the one against and the one in favor – have both strong views and opinions. This article is a part of a paired series. A twin article presenting the supporting viewpoint can be found on our website.

Every state that joins the Union must sign the Treaty on the Functioning of the European Union (TFEU). According to it, Member States should adopt the euro once they meet specific conditions. 

Bulgaria has been part of the European Union (EU) since 2007. Upon joining, Bulgaria did not meet the needed requirements to join the Eurozone. In 2025, the European Commission declared Bulgaria ready to take this next step.

The euro area comprises all Member States of the Union that have replaced their national currencies with the euro. Currently, 20 out of all 27 Members have taken this step. 

The main objective of this unified currency is to further integrate Member States and ensure price and economic stability.

 

The Opposing Side

The main arguments used to oppose the adoption of the euro are the loss of Bulgarian identity and financial independence, which would lead to an economic crisis in the form of extraordinarily high inflation.

The Bulgarian far-right nationalist party "Revival" has given an active word of warning about the aforementioned consequences. Kostadin Kostadinov, the leader of the party, even called for a referendum. This motion was later rejected by Parliament. The party has also organized protests, some even escalating to violence.

 

Inflation

According to AUBG Economics Prof. Nikos Fatouros, any potential consequences that could come as a result of adopting the euro have already been experienced. He adds that there is no credible evidence to expect inflation in Bulgaria after January 1.

One of the reasons is that the Bulgarian National Bank (BNB) has not been independent for many years.  BNB must adhere to the EU’s regulatory framework as it is part of the European System of Central Banks (ESCB). 

This means it cannot set its own monetary policy, separate from that of the ESCB. After joining in January, BNB will also have to abide by the 2% inflation policy of the European Central Bank (ECB).

The other important reason why the risk of extremely high inflation is low is that the lev has been pegged to the Deutsche Mark since 1997, and later, in 1999, to the euro when Germany adopted it.

This has lead to a constant exchange rate between the two currencies. Any change in the value of the euro directly affects the lev on the same scale as the lev.

 

The Greek Crisis

Another common argument, given as a reason to not replace the lev, is the Greek crisis from 2009. 

Greece changed its currency from the drachma to the euro in 2002. In 2009, when the global financial crisis hit, Greece’s economy collapsed, entering a recession. 

There were speculations and even claims that the crash happened as a result of the country's adoption of the euro, and that the same would happen with Bulgaria. 

In the words of Prof. Fatouros, “There is a difference between causation and correlation. The adoption of the euro did not cause the crisis.” 

He went on to explain that while it is true that the crisis happened after Greece had adopted the euro, there is no credible evidence to support any claim that the euro caused the collapse. 

The facts are that, prior to the change, Greece was misrepresenting data about its finances, building up its public deficits and public debt. When the global economic crash happened, the weaknesses of its economy were exposed.

 

The Loss of National Identity

Besides the economic argumentation, the opposition claims that the replacement of the lev will be a major blow to Bulgaria'snational identity.

AUBG Politics Prof. Robert Philps helps us understand the core of the identity crisis.

In his words, people tend to look at this not as an economic issue, but rather as a personal one: “Currency holds symbolic and emotional value,” he said. 

For some Bulgarians, a change in the currency is the same as a change in identity. Citizens feel like they are giving up a part of themselves. 

It is irrelevant that the country has given up its authority over the lev in 1997; what matters to those people now is that they are giving up the symbolic power of the currency.

 

 

Edited by: Hary Dikov and David Mitov