Thousands of people have been protesting in the Southeastern European nation of Bulgaria. The demonstrators are making their voices heard ahead of a key decision by European Union authorities, regarding the country’s adoption of the Euro. Bulgaria is a member of the European Union. It joined the bloc on January 1, 2007, however, Bulgaria still doesn't use the EU’s common currency. It has its own currency, the Bulgarian Lev. But the Lev’s days might be coming to an end soon.
The European Commission is issuing a report on Bulgaria’s economy. It assesses whether Sofia has fulfilled the criteria to join the Eurozone. There are five criteria. Inflation, the budget deficit, debt-to-GDP ratio, long-term interest rates of government bonds, and currency exchange rate stability. All these factors have to be within a fixed range for a country to become eligible to use the Euro. 18 years after joining the EU, Bulgaria is finally expected to pass the assessment.
But the impending adoption of the Euro has created a deep divide within Bulgaria. A sizable number of Bulgarians are keen to keep the Lev. They are even calling for a referendum on the currency switch. Many are afraid of moving to the Euro because they are afraid of inflation. The most recent country to adopt the Euro is Croatia. It made the switch on January 1, 2023, and Croatia has faced high inflation in the months following the move. But so has almost all of Europe, because of Russia’s invasion of Ukraine. However, inflation fears refuse to die down in Bulgaria.
There are also fears about Bulgaria losing its financial independence if it adopts the Euro. The Bulgarian Lev isn’t truly independent at the moment either. Bulgaria has pegged it to the Euro for years, as part of the Exchange Rate Stability Criteria. But when Bulgaria switches to the Euro, the country’s central bank will join the governing council of the European Central Bank, arguably giving Sofia more say than it has at present.
Adopting the Euro is expected to bring in more investment, lower borrowing costs, and eliminate exchange fees for Bulgarians travelling within the EU. Despite the potential benefits, many in Bulgaria remain skeptical.
