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Starting on 1 January 2026, Bulgaria will replace the lev with the euro as its national currency.
The Balkan country of 6.5 million people joined the EU in 2007 and formally began the process of joining the Eurozone in 2018.
It now respects the four Maastricht criteria to join the currency bloc: price stability, with an inflation rate of 2.7% in 2024, sound public finances, with public debt and deficit levels of 24% and 3% of GDP in 2024, exchange rate stability and long-term interest rates stability.
In 2024, Bulgaria was the poorest EU country, in terms of GDP per capita.
It is also the EU country the most affected by poverty with more than 21% of its population living below the poverty line.
Economic boost
Brussels and Sofia hope joining the Eurozone will boost the country’s economy and strengthen its European integration.
“The bigger effect is the long-term effect, basically boosting confidence when it comes to the currency, to the purchasing power of the currency, the confidence of foreign investors, people who buy Bulgarian debt, but also people who invest in the country, in different sectors,” Petar Ganev, Senior Research Fellow at the Institute for Market Economics told Euronews.
The adoption of the euro could also impact Bulgaria’s credit rating.
“Credit agencies deduct from our credit rating because of the currency board,” Ganev explains.
“They say that our debt is in a foreign currency, which is the euro (…) They say, if you have foreign debt, in a different currency, which is not yours, then we deduct from your credit rating. So we have a deduction of our credit rating for 28 years, which now will be gone.”
In addition, he thinks that joining the Eurozone will only marginally contribute to inflation.
“It’s not the main factor. The main factor is the consumption, which is supported by inflationary budget and by record high credits, especially for new homes,” he said.
Political turmoil
But it’s political instability that might negatively impact Bulgaria’s economy.
The government resigned in mid-December after weeks of anti-corruption protests.
Bulgaria had “seven elections in three years, now the government again resigns, so we cannot form a long-term political stability or government. This leads to problems with the budget because we cannot vote the budget on time. Four out of the last five years we entered without a budget,” Petar Ganev explained.
The conversion rate will be fixed at 1 EUR = 1.95583 BGN.
Prices have been displayed in both lev and euro since August to allow consumers and business to adjust. In addition, both currencies will be accepted for cash payments in January to smoothen the transition.
