Bulgaria and the euro

According to the latest national report for Bulgaria from the autumn 2024 edition of the Standard Eurobarometer, nearly two-thirds of Bulgarians view the free movement of people as the primary benefit of EU membership.

The Bulgarian National Bank (BNB) has voiced strong opposition to a proposed 10% tax on banks' excess profits, citing concerns that it would destabilize the financial sector. Governor Dimitar Radev argued that implementing such a measure to address next year's budget deficit would result in higher credit costs and negatively impact the stability of Bulgaria's financial system.

President Rumen Radev emphasized the stability of the Bulgarian National Bank (BNB), describing it as one of the most secure financial institutions in Europe, despite ongoing political instability. He made these remarks during the swearing-in ceremony for Lyubomir Karimanski, who joined the Governing Board of the BNB.

Bulgaria could potentially adopt the euro on July 1, 2025, if all the necessary steps are taken within the required timeframe.

Bulgaria faces significant challenges on its path to euro adoption, with political instability emerging as a critical hurdle rather than inflation. While inflation rates have shown signs of cooling—decreasing by 1% from August to September and 1.2% year-on-year—Bulgaria still has not met all the Maastricht criteria necessary for eurozone entry.

Fitch Ratings has confirmed Bulgaria's long-term credit rating at BBB with a positive outlook. The agency highlighted that the rating is bolstered by the country's robust external and fiscal position when compared to similarly rated nations, as well as the stable political framework provided by EU membership and the enduring currency board regime.

The Bulgarian Ministry of Finance is working on a budget with a deficit of up to 3% on an accrued basis, confirmed Deputy Minister Martin Danovski. This figure aligns with the Maastricht Treaty criteria, which is essential for Bulgaria's entry into the Eurozone.

Bulgaria is planning to transition from the leva (BGN) to the euro (EUR) in just over a year as part of its strategy to enter the Eurozone. While the exact date remains uncertain, the implications of this shift are clear. The newly adopted euro law outlines the process and addresses potential consequences of further delaying Eurozone membership.

The right-wing party "Revival" (Vazrazhdane) has once again failed in its attempt to initiate a referendum aimed at preserving the Bulgarian lev. The proposal for a national poll asking, "Do you agree that the Bulgarian lev should be the only official currency in Bulgaria until 2043?" was rejected.

Two of the candidates from the president's "home list" have agreed to serve as the next acting Prime Minister. This follows meetings with President Rumen Radev, who is still deliberating on the final decision. The two individuals are current acting Prime Minister Dimitar Glavchev and Petar Chobanov, the Deputy Governor of the Bulgarian National Bank (BNB).