Bulgaria became the 21st member of the euro zone on Wednesday, adopting the single European currency in a landmark move that deepens its integration with the European Union but comes amid political instability and lingering public unease over possible price rises.
The Balkan nation officially replaced its national currency, the lev, with the euro on New Year’s Day after meeting the EU’s convergence criteria on inflation, budget deficits and public debt. The change marks the most significant economic transition for Bulgaria since it abandoned a Soviet-style planned economy in 1989 and embarked on the path toward democracy and market reforms.
Supporters of the switch say adopting the euro will boost investor confidence, lower transaction costs, and help anchor the country more firmly to Western Europe’s economic and political institutions.
“This is one of the biggest strategic achievements for Bulgaria since the end of communism,” Finance Minister Asen Vasilev said in a statement. “It will strengthen financial stability, improve our investment climate and reinforce Bulgaria’s place at the heart of Europe.”
Bulgaria joined the European Union in 2007 but has lagged behind many of its peers in income levels and institutional reforms. The government hopes euro adoption will help narrow the gap by attracting foreign capital and reducing borrowing costs for businesses and households.
However, the milestone has been greeted with caution by many Bulgarians, particularly amid repeated elections, fragile coalition governments and low public trust in political institutions.
Surveys show that a significant portion of the population fears the changeover will lead to price increases, as happened in some other euro zone countries after they adopted the currency, even when official data later showed inflation effects were limited.
“I’m worried that everything will suddenly become more expensive, while salaries stay the same,” said Elena Petrova, a 52-year-old shop worker in Sofia. “Politicians say it will be good for us, but ordinary people are not convinced.”
To ease concerns, the government introduced a dual pricing system requiring shops to display prices in both lev and euro for several months and promised stricter controls on unjustified price hikes. Consumer protection authorities said they would fine companies found exploiting the transition to raise prices unfairly.
The Bulgarian National Bank said the country’s long-standing currency board, which had pegged the lev to the euro for more than two decades, meant the practical impact on monetary policy would be limited, but membership would give Bulgaria a seat at the European Central Bank’s decision-making table.
Despite the concerns, business groups have largely welcomed the move, saying it will simplify trade with euro zone partners and reduce exchange rate risks.
“Joining the euro zone sends a strong signal that Bulgaria is a stable and predictable place to do business,” said Dobri Mitrev, head of the Bulgarian Industrial Association.
