site.btaThe Lev’s Legacy: A Historian Reflects on Currency’s Origins, National Identity, and European Integration

On July 8, 2025, the EU’s Economic and Financial Affairs Council (ECOFIN) is expected to make a final decision on Bulgaria’s accession to the eurozone, paving the way for the country to adopt the euro as its official currency on January 1, 2026. As the Bulgarian lev prepares to retire after nearly a century and a half in circulation, economic history professor Ivan Rusev reflects on the currency’s origins, its role in shaping national identity, and Bulgaria’s long journey toward European integration.

The lev was introduced just two years after Bulgaria's liberation from Ottoman rule. In 1880, the Second Ordinary National Assembly passed a law granting Bulgaria the right to mint its own coins. Despite its status as a newly independent state, Bulgaria successfully introduced a national currency - thanks in large part to the vibrant Bulgarian trade networks that had flourished during the pre-liberation Revival period.

A National market before a national state

According to Prof. Rusev, Bulgarians developed monetary and financial literacy well before gaining formal independence. This, he argues, was due to the existence of a de facto national market under Ottoman rule.

In 1850, the Ottoman Empire adopted a set of trade rules based on French law. These modern trade laws introduced rules for company operations and legal-economic procedure such as bankruptcy. “Bulgarians took a keen interest in this commercial code and used it as the basis for regulating their business activities,” Prof. Rusev explained.

During that period, Bulgarian merchants ranged from small traders to large-scale entrepreneurs. Prominent examples included brothers Evlogi and Hristo Georgievi, who established businesses in Galati and Bucharest in modern-day Romania. Their firm’s capital grew from 145,000 kurush in 1839 to more than 11.6 million kurush by 1878. Other traders, such as Hristo Tapchileshtov of Kalofer, operated out of Constantinople (now Istanbul).

These companies traded in food, clothing, and leather.

“These firms developed vast networks of smaller merchants and intermediaries,” said Prof. Rusev. “Tapchileshtov’s company employed around 400 people; the Georgievi brothers had more than 500. If you plotted their business presence on a map, it would closely trace the borders of what later became the Bulgarian state.”

These networks extended beyond the Ottoman Empire, reaching into Italy, France, and the United Kingdom. As active players in the Ottoman market, Bulgarian merchants became familiar with modern trade practices and monetary policy, including the bimetallic standard (currency backed by both gold and silver). This knowledge eased the public’s later transition to a national currency.

Adoption of the lev

On May 27, 1880, Bulgaria formally adopted the lev as its national currency. Coin minting began a year later, and in the following decade coins of 2, 5, and 10 stotinki, as well as 1, 2, 5, 10, and 20 leva, were issued. The law also introduced bimetallism, modeled after the Latin Monetary Union, which included France, Belgium, Italy, and Switzerland. “The lev followed the model of the French franc,” Prof. Rusev notes.

The Bulgarian National Bank was established as the country’s central monetary authority. Rather than naming the new currency the “franc” - as revolutionary and politician Stefan Stambolov had proposed - Bulgaria opted for a uniquely national name.

“Late 19th century was a period when Bulgaria, like other newly liberated Balkan states, adopted the Western European model of the Sovereign state. A national currency was a powerful symbol of sovereignty and identity,” Prof. Rusev explained. The lev was never meant to compete with major global currencies and its parity with the French franc ensured relative monetary stability. “Throughout the 19th century, the French franc was widely considered the most reliable currency for economic, political, and social reasons,” he adds.

The lev’s primary purpose was to provide a uniform currency for the Bulgarian national market. Nevertheless, the French franc continued to play a major role. Most state loans were contracted in francs, and the currency remained in unofficial circulation. “Well into the mid-20th century, Bulgarians still made informal yet trustworthy payments using those old, gold- and silver-backed [md1] French coins,” said Rusev.

The lev and the “Bulgarian Economic Miracle”

Between Bulgaria’s Liberation and the Balkan Wars (1912–1913), the country experienced rapid economic development. Exports surged during the 1890s. “At the time, some European correspondents based in Sofia referred to this period as the ‘Bulgarian economic miracle,’” notes Prof. Rusev.

Bulgaria’s agrarian economy required significant investment in agriculture, prompting the creation of financial institutions such as the Bulgarian Agricultural Bank (1903) and the Bulgarian Central Cooperative Bank (1910). “The demand for credit is a sign of an expanding and active economy,” he said.

Military preparations also fueled economic activity. “After failed revolutionary attempts to unite Bulgarian-populated territories in the early 20th century, the national goal shifted toward achieving that goal through military means. That required foreign loans, often secured through French banks,” Prof. Rusev explained. “Unfortunately, history shows that war often serves as a catalyst for accelerated economic growth.”

During this time, the lev continued to follow the Latin Monetary Union model. Banknotes were introduced for the first time, though they initially met public skepticism. “People didn’t trust paper money were backed by precious metals the way coins were. It took until 1894 - fourteen years after the lev was introduced - for banknotes to gain broad public acceptance,” said Rusev.

Toward a common European currency

In the aftermath of two world wars, the United States emerged as the dominant global economic power, soon followed by Japan and China. “European countries realized they couldn’t compete on the global stage with their fragmented economies. They had to work together to create a larger, common market - but without erasing national identities,” Rusev said.

This realization led to the founding of the European Coal and Steel Community (1951) and the European Economic Community (1957), precursors to today’s European Union. Their aim was to create a common market and ensure lasting peace through economic cooperation. After decades of integration, the 1992 Maastricht Treaty introduced the idea of a single European currency - the euro.

Bulgaria’s 20th-century dependencies

For most of the 20th century, Bulgaria remained outside these developments due to its geopolitical alignments.

During World War I, it was economically aligned with Germany. In the 1930s, the Great Depression hit developed economies hardest, but Bulgaria also suffered - and drew closer still to Germany.

Following World War II, as a member of the Eastern Bloc, Bulgaria was cut off from Western Europe's integration efforts. In 1952, the lev was pegged to the Soviet ruble and ceased to be freely convertible on international markets.

Only after the fall of socialism in 1989 did Bulgaria begin its path toward European integration.

The road to the euro

“In 1996, Bulgaria experienced a deep financial crisis that led to state bankruptcy and hyperinflation,” recalled Rusev. “A currency board was introduced the following year, pegging the lev to the Deutsche Mark - one of the world’s most stable currencies at the time.”

When Germany adopted the euro in 1998, the lev’s peg shifted automatically to the new European currency.

Upon joining the European Union in 2007, Bulgaria committed to entering the eurozone once it met key convergence criteria: inflation control, low government deficit and debt, and currency stability.  Prof. Rusev underscored that these standards must be maintained even after accession. “They ensure economic stability, which is essential for attracting foreign investment and raising living standards,” he explained.

On July 8, 2025, ECOFIN is expected to give final approval to Bulgaria’s eurozone entry. The transition has triggered public concerns about price gouging and a perceived loss of national identity. Protests have flared up in Sofia and other major cities.

Still, Prof. Rusev remains optimistic. “If Bulgaria adopts the euro on January 1, 2026, and we can get through the first year or two without a major military conflict that disrupts the European economy, many of the fears being spread — often deliberately - will prove unfounded.”