One person hits a drum, with the Euro logo on May 31, 2025 being crossed into the eurozone during a demonstration against Bulgaria in Sofia in Sofia in Sofia in Sofia.
Nikolay Doychinov | AFP | Getty pictures
Bulgaria is expected to be the 21st member of the euro zone after being picked up by the European Commission and the European Central Bank last week – but not everyone is convinced that the move is a good idea.
Bulgarian Prime Minister Rosen Zhelyazkov, a member of the Mitte-Rechts-Gerbe party, has led to a priority of the euro zone and argues that it would increase economic stability and growth.
However, the fears of higher prices and a loss of independence have heated up the nationalist party against the country's promotion. A recently carried out survey by the European Union has shown Half of the population of Bulgaria is against the acceptance of the euro.
Economists and experts entered the potential risks of Bulgaria to join the euro, and explained what the Eastern European country could lose and gain from the move.
Inflation and interest rates
“The most immediate concern is a price walk during the currency change because some companies can call up prices. Many Bulgarians fear that membership in the euro zone could undermine their purchasing power, especially in poor rural areas,” said Valentin Tataru, an economist at Ing, Bulgaria, to CNBC.
Nevertheless, he also noticed that the currency of Bulgaria had long had a fixed exchange rate for the euro, and therefore “the transition inflation base should be mild”.
The euro zone is ready for a new member: Bulgaria
The second important concern is what the currency of Bulgaria, the LEV, for the independence and sovereignty of the country – will mean – for which it has become symbolic after Andrius Tursa, Central and Eastern Europe at Teneo.
“The replacement by the euro can be perceived by parts of the population as a loss of national control,” he told CNBC. In addition, there is consideration that the control of monetary policy is given up, since the countries in the euro zone are subject to decisions from the ECB, added Tursa.
For example, the Bulgarian National Bank (BNB) would no longer just be responsible for building the country's interest rates only on the basis of the development of its individual economy.
“However, the countries of the euro zone benefit from lower interest rates due to the credibility of the ECB and the reduced currency risk,” Tursa emphasized. Lower interest rates usually benefit borrowers because loans and mortgages are becoming more affordable.
Economic stability and power
Admission to the euro zone and securing the supervision of the ECB could increase economic stability and growth prospects for Bulgaria, Jasmin Groeschl, Senior Economist for Europe at Allianz SE, told CNBC.
For example, foreign investments could increase, she suggested, and the country's gross domestic product would probably be increased by membership of the euro zone.
“A deeper financial integration would strengthen the Bulgaria financial system as part of the supervision of the ECB and improve monetary stability,” said Groeschl. “The takeover of the euro would strengthen Bulgaria's relationships with the EU and improve its influence and credibility,” she added.
Important areas that support the economy such as trade and tourism could also be supported, said Teneos Tursa.
Many of the most important trading partners in Bulgaria are in the EU, with most of its exports, according to data from the country's statistics office, to members of the 27-stage block in 2023. The most important sectors include machine and transport devices, manufactured goods and food.
Tourism has now made an important contribution to the economy because Bulgaria positions itself as a summer and winter destination. Over 13 million foreigners visited the country in 2024, as official statistics showed.
“Bulgaria's accession to the euro zone would make the trade and tourism flows with other countries of the euro zone easier by eliminating the costs and the stress of currency conversion,” said Tursa, adding that this would be particularly important due to the strong integration of Bulgaria into the EU supply chains.
Political tensions
A risk characterized by economists and analysts is the political tensions related to the euro adoption in Bulgaria.
“The public opposition to the euro adoption has already triggered remarkable protests, and in the medium term the problem could become an essential driver for increasing support for populist and euro -skeptical political movements,” explained Teneos Tursa.
Despite local protests and concerns regarding the euro zone ascension, at least in the long term the benefits of the country predominate all negative, argued Allianz SE Groeschl.
“The compromise is to lose economic autonomy in exchange for deeper integration,” she said. “Although Bulgaria lose monetary political control and are subject to strict fiscal rules, the advantages of greater economic stability, the reduction in transaction costs and the stronger integration into the EU market would generally outweigh these disadvantages.”
Tataru from Ing made a similar tone and said that there should be no big shock because the LEV is already bound to the euro.
“Entry to the euro is one of the most strategic steps that Bulgaria can take to secure long -term prosperity and deeper European integration,” he said.
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