Bulgaria will become the 21st member of the euro zone (Schengen currency area) on Thursday, despite deep skepticism in some quarters due to inflation concerns.
The southern European country has been a member of the European Union since 2007, but it was not until January 2025 that it officially met the criteria for joining the eurozone, paving the way for currency appreciation after a long delay.
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The move increases the number of Europeans using the euro to 356 million and extends the single currency geographically to the Black Sea region for the first time, despite ongoing geopolitical tensions.
However, there are concerns among some Bulgarians that the introduction of the euro could trigger an economic crisis in the country, which is considered the poorest in the EU.
Distrust towards the government is widespread. In early December, the country’s minority pro-EU coalition was forced to resign after massive protests erupted over its proposed budget, which called for tax increases. Despite the plans being scrapped, the protests expanded to include demands for far-reaching government changes.
Here’s what we know about why Bulgaria’s move to adopt the euro was so controversial.
what’s happening?
Bulgaria, a country of 6.7 million people, joined the EU in 2007 and has been pushing to join the eurozone ever since.
However, as the government grapples with a series of corruption allegations, political instability has slowed progress on the reforms needed to accept the country as a member.
Under the 1992 Maastricht Treaty, EU member states must meet five criteria before joining the eurozone. These set fixed targets for inflation, budget deficits, debt-to-GDP ratios, exchange rate stability, and long-term interest rates. Monetary policy is centrally managed by the European Central Bank (ECB).
The EU finally gave the green light to Bulgaria’s ambitions in January 2025, after determining that the country had met the economic and legislative criteria to join the eurozone. In June and July, the EU institutions (European Council in Brussels, Fiscal Affairs Council and European Parliament in Strasbourg) approved membership.
How does joining the eurozone work?
The EU sets an exchange rate of 1 euro to 1.95583 Bulgarian Lev (BGN) under the European Exchange Rate Mechanism, and Bulgaria joined this mechanism in 2020 as a condition of adopting the euro. This move officially pegged the lev to the euro. However, the lev had been unofficially pegged to the euro since 1999, when Germany switched to the euro. This is because Bulgaria pegged its currency to the German mark in 1997 in order to stabilize the economy and curb soaring inflation. Therefore, many analysts say formal adoption of a single currency may not bring about as much change as some fear.
Furthermore, although Bulgarian companies now have access to the single euro market without additional exchange rate risks, researchers at the National Bank of Belgium estimate that since 1999 more than 80% of Bulgaria’s imports have been denominated in euros.
Bulgaria has been subject to ECB policy since joining the exchange rate mechanism in 2020. The bank will now have a seat on the bank’s board of directors, giving the country a say in its ratings policy.
There will be a transition process for businesses and consumers. In-store prices will be displayed in both leva and euros until August 2026, and leva will continue to be accepted until January 31st.
For six months, Bulgarians will be able to exchange leva for cash at commercial banks, post offices and the National Bank of Bulgaria. When old currency is collected, it is usually shredded and recycled.
Why are some Bulgarians skeptical about joining the eurozone?
Regarding the question of joining the eurozone, Bulgarians are divided almost evenly in opinion. According to a survey conducted by the Bulgarian company Alpha Research, 46.5% supported the introduction of the euro as of May 2025, while 46.8% opposed it. According to the pollster, most of those who opposed the move were residents of small towns and villages, often pensioners or semi-educated working-age people active on social media.
According to the study, the main concerns driving opposition to the euro are that the change will drive up prices, impact purchasing power and lower wages.
Zsolt Darvas, an analyst at Bruegel, a Brussels-based think tank, told The Associated Press that experience in other countries shows that “when there is a switch from the national currency to the euro, there is often a mild inflationary effect, but usually less than 1%.”
Speaking in the capital Sofia in November, ECB President Christine Lagarde said switching to the euro would “facilitate trade, lower financing costs and make prices more stable.” He added that the introduction of the euro would have a “modest” inflationary effect of 0.2-0.4%.
However, many Bulgarians fear this move will lead to a loss of Bulgarian identity, as lev banknotes now feature prominent figures. For example, Ivan Milev, whose portrait appears on the 5 Lev banknote, was a prominent early 20th century painter who contributed to the formation of Bulgarian modernism.
Bulgaria has endured seven parliamentary elections in the past four years, and many voters are concerned about whether the political system can cope with the changes.
The ruling coalition government, which was forced to resign in December after proposing tax increases, was itself divided on the issue.
It was a fragile coalition of ideologically opposed groups, including the centre-right and pro-European Citizens for the Development of Europe (GERB), the pro-Russian and post-communist Bulgarian Socialist Party-United Left (BSP-OL), and the conservative nationalist “Some People Like This” (ITN).
President Rumen Radev, backed by BSP-OL and ITN, called for a referendum on the issue in June, citing the country’s unpreparedness, sparking a heated debate in parliament. However, lawmakers rejected the move.
Political opponents, especially pro-Russian parties ideologically opposed to further integration with the EU, argue that introducing the euro would affect Bulgaria’s fiscal sovereignty and make it too dependent on Brussels.
“Someone else will decide how we spend our money. The Bulgarian budget will be approved by the European Central Bank,” Kostadin Kostadinov, head of the pro-Russian Vazladane party, told demonstrators calling for a referendum on the currency issue in June. “This is an anti-national coup and treason,” he added.
Kostadinov and other far-right politicians are also accused of spreading false claims that ordinary Bulgarians will lose their savings as a result of the changes, and Russian online networks are also suspected of amplifying similar narratives, Euronews reported.
“I am against it, firstly because the lev is our country’s currency,” Emil Ivanov, a pensioner from Sofia, told Reuters. “Secondly, Europe is coming to an end, something even the American president mentioned in his new national security strategy.
“If this happens, I might not be alive.” [the EU’s demise] But that’s the direction it’s all headed,” she added.
Euroscepticism is on the rise across the continent as far-right parties grow in influence. Nearly a third of European voters now support far-right parties, compared with just 3% in the mid-2000s, according to the London-based Center for Economic Policy Research (CEPR).
However, despite the mistrust, many Bulgarians are happy about joining the eurozone, especially companies that trade across borders and those in the tourism industry. A government sign in Sofia displays the message: “Common past, common future, common currency.”
Should EU member states adopt the euro?
Yes, all 27 EU member states are legally obliged to use the euro, but there is no set deadline by which they must adopt the euro. Member states have the right to postpone adoption and set their own timetables, and the EU publishes its own report every two years assessing member states’ readiness to join the eurozone.
In January 2023, Croatia became the last EU member state to adopt the euro, abandoning it at a rate of 7.53 kuna (KN) to 1 euro. It joined the EU in 2013.
Six EU member states are not yet members of the eurozone: Poland (zloty), Denmark (krone), Hungary (forint), Romania (leu), Sweden (krona), and the Czech Republic (koruna).
Most countries choose to maintain their national currencies in order to maintain independence from the ECB on important issues such as growth rates, managing inflation, and national debt, and to be able to choose to devalue their currencies. Only the Romanian government has set a tentative deadline of 2027 or 2028 for joining the single currency.
Under the 1992 Edinburgh Agreement, Denmark became the only member state with a special opt-out agreement with the EU after Danish voters rejected the Maastricht Treaty in a referendum and instead voted to retain the krone. In the second referendum on eurozone membership in 2000, 53.2% of voters again answered “no”.
The UK, which was an EU member state until 2020, secured an opt-out during the Maastricht Treaty negotiations in 1992 and never adopted the euro.
When it was founded in 1999, 1 euro was worth about $1.17; today it is worth $1.18. Against the pound, the euro was originally priced at around £0.70, but the current rate is around £0.87.
