Bulgaria is close to joining the euro in January 2026, a long awaited step since joining the EU. After years of reform and preparation, the country is hoping to implement the new currency, signifying a European united front amid geopolitical uncertainty.
Bulgaria has had a currency board linking the lev to the euro since hyperinflation in the 1990s. This limits the scope for independent monetary policy and makes the country dependent on European Central Bank decisions. The switch to the euro promises lower transaction costs, cheaper borrowing through lower interest rates, an improvement in the country’s credit rating, an influx of foreign investment, support for tourism (12% of GDP) and more. Nevertheless, critics warn of potential risks associated with eurozone vulnerabilities and ECB policies.
The euro transition is perceived ambiguously by the population. A May poll showed that only 20% of Bulgarians support the introduction of the euro from January 2026. More than half said that they feel insufficiently informed about the consequences of changing the currency. The main fear is rising prices, which is common for countries preparing for euro changeover.
After the 2014 banking crisis, Bulgaria strengthened supervision of the financial sector, joined the EU banking union and the ERM-2 exchange rate mechanism. Amendments were also made to the Central Bank legislation following comments from the ECB. The country maintains one of the lowest levels of public debt in the EU and inflation has been brought down to tolerable levels in early 2025, despite pressures caused by the war in Ukraine. The government has requested extraordinary eligibility reports from the European Commission and the ECB – these are expected to be published on 4 June 2025. The European Commission will then submit an accession proposal, which must be approved by all member states. The final exchange rate will be approved by the EU Council of Finance Ministers. Bulgaria insists on maintaining the current fixed exchange rate of the lev against the euro.
Despite parliamentary support, political instability since 2021 and a series of snap elections (seven votes) have hampered plans. Some politicians who formally support the euro are threatening a vote of no confidence in the government immediately after final approval.
