Bulgaria is set to formally adopt the euro on New Year's Day, becoming the 21st member of the Eurozone and marking a significant milestone in its integration with the European Union. The historic changeover arrives, however, against a backdrop of political turmoil and deep-seated public scepticism, with many citizens fearing the switch will trigger price rises.
Public Sentiment and Political Instability
Despite the government's successful completion of the adoption process, which included reducing inflation to 2.7 per cent to meet EU criteria, the move is not universally welcomed. A Eurobarometer poll from March indicated that 53 per cent of Bulgarians surveyed opposed joining the single currency, with only 45 per cent in favour. This unease is fuelled by concerns that merchants will round prices up during the changeover, potentially worsening an inflation rate that has already rebounded to 3.7 per cent.
The political landscape adds further uncertainty. The government resigned after less than a year in office following nationwide anti-corruption protests, leaving the country without a regular budget for the coming year. This political vacuum, ahead of an eighth general election in five years expected next spring, is hampering crucial structural reforms and decisions on EU fund allocation.
Strategic Benefits Versus Economic Realities
Proponents, like 64-year-old Nevelin Petrov, hail the euro as Bulgaria's rightful place among developed European democracies and a catalyst for long-term prosperity. They argue it will boost investor confidence and solidify economic ties with Western Europe.
Conversely, small business owners like Darina Vitova, who runs a Sofia pedicure salon, express concern that the shift is happening too rapidly. She notes the vast disparity in living standards and incomes compared to richer EU nations, fearing life will become more difficult for the average Bulgarian, whose average monthly wage is 1,300 euros.
Analysts like Petar Ganev from the Institute for Market Economics warn that the outgoing government's resignation sends a signal of uncertainty to foreign investors, potentially undermining the positive signal of euro adoption. He views Eurozone membership as an additional mechanism to address corruption, though not a cure for Bulgaria's chronic political instability.
Disinformation and External Influence
The debate has been polarised by nationalist and pro-Russian groups, such as the Vazrazhdane party, which have organised anti-euro rallies. They exploit fears of poverty and loss of national identity, with social media spreading disinformation, including false claims about bank account confiscations.
Dimitar Keranov of the German Marshall Fund states this disinformation campaign aims to weaken support for the EU and NATO, aligning with Moscow's interest in polarising Bulgarian society. He asserts that deeper European integration, like euro adoption, makes it harder for Russia to exert influence.
Economically, the immediate impact may be muted. The Bulgarian lev has been pegged to the euro at a fixed rate of 1.95583 levs per euro since 1999. The European Central Bank's Christine Lagarde has noted that new members typically see only a slight, transient price increase of 0.2 to 0.4 per cent post-adoption. For January, the lev and euro will circulate together for cash payments, though change will be given exclusively in euros.
