site.btaBulgaria’s Eurozone Journey: Opportunities and Challenges of Adopting the Euro

This article is based on content provided by agencies participating in the European Newsroom (ENR), including the Bulgarian News Agency.

January 1, 2002, was a day of shiny new coins and banknotes, but also of confusion and advanced math at times: On that day, the common EU currency, the Euro, in its physical form was launched in 12 member states.

Following several years prior to that being used only as an accounting currency, the Euro finally made its debut among the then approximately 308 million citizens of the original Eurozone members Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

An economic and monetary union had been a goal of the European Union for decades. Since its launch the Euro has become a fixed part of the international financial system, hiccups such as the European sovereign debt crisis from 2008 to 2012 notwithstanding.

Bulgaria is the latest member state set to join the monetary union, currently consisting of 20 out of the 27 EU countries: In early June the Commission gave the green light in its Convergence Report for the country to adopt the Euro starting in January 2026, thus making it the 21st Eurozone member.

The Eurogroup then gave its recommendation, which was endorsed at an ECOFIN meeting, where the bloc’s economy and finance ministers get together regularly. What’s still needed is the seal of approval from the EU’s heads of state and government at the European Council – expected this Thursday or Friday and a final decision on July 8, at the next ECOFIN. The latter needs unanimous approval of the Euro-Lev conversion rate, which the Commission is expected to propose on June 30.

Hope and nostalgia

The Commission said Bulgaria had fulfilled the strict criteria “intended to ensure that a country is ready to adopt the Euro and that its economy is sufficiently prepared to do so”.

The decision was welcomed by other members: “A common currency for another member of the European Union is a significant step for the economy of the entire union,” Slovak Finance Minister Ladislav Kamenicky said.

The European Central Bank (ECB) also gave a positive opinion, hailing the EU’s poorest member’s “tremendous dedication to making the adjustments needed”.

In order to adopt the Euro, countries have to bring their national legislation in line with relevant EU law and meet specific conditions designed to ensure economic convergence. These so-called convergence criteria are macroeconomic indicators focusing on price stability, long-term interest rates, exchange-rate stability as well as sound and sustainable public finances.

Bulgaria with its 6.4 million inhabitants has spent several years preparing its economy, particularly bringing down its inflation. The country is already preparing with prices displayed in both currencies, updated ATMs and anti-speculation measures.

In Bulgaria the feelings range from jubilation in the government to a backlash on the streets: Prime Minister Rosen Zhelyazkov hailed the Commission’s green light “a remarkable day” that followed “years of reforms, commitment and alignment with our European partners”. Representatives of trade unions, industry and banking are on board with the Euro.

Supporters of the pro-Russian opposition party Vazrazhdane repeatedly staged protests, demanding a return to more national sovereignty and keeping the national currency, the Lev. President Rumen Radev had also tried – and failed – to apply the brakes by proposing a referendum on joining the Euro in 2026. He questioned the timing of the adoption as he believes that Bulgaria needs more time to prepare.

Public favour seems to be waning, however. Eurobarometer’s Spring 2025 survey found that 43% of Bulgarians are in favour of adoption, 3 percentage points down from the autumn survey. Some 50% are against the Euro, up by 4 percentage points from last autumn.

Bulgarians do see the advantages, without donning rose-tinted glasses. “It will give us greater freedom and make travelling abroad easier,” a 36-year-old software developer who introduced herself as Akseniya said, though she added feeling “a bit of nostalgia”. “We are losing a bit of our identity, our Lev.”

The main concerns of Bulgarians are driven by a potential increase in inflation and the prices of the consumer basket goods. The government has started an information campaign, while the regulators are monitoring the prices. 

From 12 to 21

Spain was among the first countries to adopt the Euro. The country’s economy has profited from its membership in the bloc – it grew tenfold in 40 years of EU membership, despite persistent structural problems. The EU offered Spain a network of stability and discipline in times of crisis such as 2008.

Even though the country boasts stronger growth with 2.6% expected for 2025 than the Eurozone average – which the Commission put at only 0.9% in its spring forecast – there are challenges ahead:

The International Monetary Fund earlier this month urged Eurozone countries with “limited” fiscal space and high debt, including Spain, to adopt significant adjustments to their budgets, as they face “spending pressures” associated with security and defence commitments and an aging population.

More than two decades after Portugal adopted the Euro, the country continues to weigh the benefits and challenges brought by its integration into the Eurozone.

The move was initially welcomed as a step toward modernization and financial stability. However, the adoption of a shared currency also meant surrendering key tools of economic policy.

With monetary decisions centralized at the ECB in Frankfurt, Portugal lost control over interest rates and the ability to devalue its currency during times of crisis. This limitation became especially clear during the Eurozone debt crisis, when Portugal faced deep economic hardship and required an international bailout.

Many Portuguese citizens also recall a more immediate impact: the rising cost of everyday goods. Though official inflation data showed only moderate increases, public perception pointed to a noticeable hike in prices after the Euro’s introduction – a sentiment that continues to influence public opinion on the single currency.

The Eurozone gradually grew to 20 with Slovenia joining in 2007, Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and then Lithuania in 2015.

Croatia was the most recent country to join in 2023. It became a eurozone member in 2023 during a period of high global inflation, but many Croats still blame high inflation on the Euro. The Croatian central bank says the country has benefited economically from the Euro, with its economy showing stability and resilience to global crises.

ECB President Christine Lagarde said last year that one of the reasons Croatia’s inflation is among the highest in the Eurozone is partly because Croatia has one of the highest economic growth rates in the EU.

Euro, no thanks

Still there are a number of holdouts, who prefer their Krones, Korunas, Forints, Zlotys and Leu to the Euro:

Denmark, with its opt-out in the 1991 Maastricht Treaty, permanently excluded itself from joining the Euro, while the others are all theoretically “enlisted”.

Sweden, despite not having a formal opt-out, voted against joining the euro in a 2003 referendum. It does not participate in the exchange rate mechanism, and in fact avoids joining indefinitely.

Czechia, Hungary and Poland do not yet participate in the Euro area and show little movement in that direction. Romania might be more willing to join but does not yet meet the necessary criteria.

The Czech government decided in April not to set a deadline for Euro adoption, despite meeting three of the five criteria last year. The reasoning behind that decision is not based on economics, Finance Minister Zbynek Stanjura said.

“You will not find clear economic reasons for and against adopting the Euro, and the experience of other countries that have adopted the Euro in the past shows that the key factor is the support of the population,” the minister said. “In the Czech Republic, just a quarter of the population now supports the introduction of the Euro and unless support increases to at least 50%, abandoning a national currency with such a long tradition does not make sense in my opinion.”

Euro without the EU

Bosnia and Herzegovina is formally far from introducing the Euro – it is not an EU member yet, nor has it met the minimum Maastricht criteria. However, through a currency board arrangement, the Bosnian convertible mark (BAM) is pegged to the Euro, which already provides many of the benefits: low inflation, a stable exchange rate, and avoidance of currency risk.

Experts warn that the unilateral adoption of the Euro without joining the EU carries significant risks – namely, the loss of control over monetary policy and the possibility that even the smallest shock in the Eurozone could be transmitted to Bosnia and Herzegovina without any adjustment mechanisms. On the other hand, according to data from the Central Bank of Bosnia and Herzegovina, citizens’ savings in Euro amount to 6.7 billion BAM, which demonstrates strong confidence in the Euro.

Digital confusion

Meanwhile, plans by the European Central Bank to introduce a “digital Euro” are repeatedly the target of misinformation.

The digital Euro would in essence be a form of cash backed by the ECB. There has not been a decision on its introduction or timeline yet, but talks about preparations regularly spark false claims by Eurosceptics, claiming that this would mean the abolition of cash and total financial surveillance of citizens.