Barely an hour into the new year, Mariana Valkova approached an ATM on Sofia’s bustling Vitosha Boulevard. Bulgaria had just become the twenty-first country in the European Union to adopt the euroa milestone that was greeted with both joy and fear, after this Balkan nation entered the European Union 19 years ago. “I withdrew 100 euros to look at the bills and celebrate later,” confesses this 58-year-old programmer with enormous joy after practicing, with her friends, the national popular dance Horo —similar to the sardana— on New Year’s afternoon in the nerve center of the Bulgarian capital.
That midnight, numerous citizens gathered, braving the sub-zero temperatures, to celebrate the entry into the eurozone in front of the headquarters of the Bulgarian National Bank, where the Bulgarian coins of their new currency were projected, thus leaving behind the leva (lion in Bulgarian), in use since 1880. “Our entry into the euro family will boost business and bring us even closer to Europe,” Valkova predicts.
Despite it being a holiday, many establishments were open that first day of the year. Some are even packed with shoppers. “We have been a little overwhelmed by the change in the system that mixes the leva and the euro,” explains Ivan Morsova, who works in a grocery store. outlet. He reveals that he had no more euros left in two hours. “We have been forced to ask customers to pay with the card,” says this 23-year-old employee. The convergence between both currencies – citizens can use them interchangeably in commerce – will last until the end of this month. Afterwards, only European currency will be accepted.
Although the real introduction is now, for two months businesses have already shown the change from the local currency to the euro, which has caused the price in euros to almost always end in cents. “I round down in euros,” says Nina Zareva, owner of a store dedicated to selling socks. This 57-year-old woman believes that the new currency will galvanize an economy that has been hit hard by the political crisis. Bulgaria is the country with the lowest per capita income in the EU (11,330 euros in 2024, according to Eurostat data). At the beginning of December, massive protests led by generation Z against budgets that citizens considered exacerbated rampant corruption triggered the en bloc resignation of the conservative-leaning tripartite government. New elections are scheduled for March, the eighth in four years. “We need steps that give us hope and, without a doubt, the euro offers them to us,” Zareva asserts in perfect Italian.
On the other hand, other businesses anticipate price increases. “The suppliers have already increased our costs, so we have done it too, although it has only been about 20 cents for the moment,” details Maria Doncheva, owner of the De vin bar, a business specializing in Bulgarian wine. The 63-year-old merchant points out that she knows of numerous establishments that have decided to close for a few days to avoid confusion with the change. “The situation will normalize in about two weeks, but it will be difficult at first because we do not have enough cash to meet the demand,” says Doncheva.
In the Women’s Market, the largest in Sofia, you can see many closed stalls. Those who have opened believe that the lack of euros could cause a problem, but they have also done so as a sign of protest. “We started by returning in euros and, immediately, we had to go back to the levy,” says Nikolai Spasov, a fruit seller while showing the box where he keeps the euros. “Consumers ask if they can pay with the old currency and, of course, we have no choice but to accept it,” he continues.
The single currency was first introduced in 12 countries on January 1, 2002 – including Spain – and has since expanded to reach 350 million Europeans who use it. Bulgaria entered the so-called “waiting room” of the single currency in 2020, at the same time as Croatia, which adopted it in 2023. “Now, at last, you will be able to participate in decision-making within this monetary union,” says Georgi Angelov, an economist at the Open Society Institute in Sofia. Among the benefits, he cites more fluid trade, lower financing costs and more stable prices. It is estimated that small and medium-sized companies will save about 500 million euros in exchange commissions and the best-performing sector in this country with access to the Black Sea will be tourism, which generates 8% of the national GDP, around 110 billion.
Since 2021, successive governments in the country of 6.4 million people have advocated joining the euro in the hope that it will boost the economy, strengthen ties with the West and protect it from Russian influence. However, Bulgarians have long been divided. Many fear that the introduction could lead to higher prices and add more political instability. According to the latest Eurobarometer, 49% of the population opposes the euro. Despite everything, President Rumen Radev hailed the entry into the euro zone as the “final step” in Bulgaria’s integration into the community family, although he regretted that Bulgarians had not been consulted through a referendum.
Since the end of December, queues of people take over the landscape of the exchange offices or banks. They change money to the euro, but they also buy gold. For six months, Bulgarians will be able to redeem up to 10,000 euros without commission and without justifying its origin. Afterwards, they must do it at the National Bank. “The euro will harm the economy because the eurozone has a very inflationary policy; the institutions do not pay attention to the looming debt crisis and countries in the eurozone that are not so large, such as Bulgaria, run the risk of having their internal political peculiarities overlooked,” says Trayan Damyanov, who has been waiting for more than half an hour and with no signs of being attended to soon. This 34-year-old insurance broker, who admits that he will buy gold because he considers it a safer value than the euro, emphasizes that inflation is high. Although the official data places it at 5%, Damyanov assures that the impact is greater: “In many foods and daily needs, the increases are around 20%; people are aware of this, although the statistics do not reflect it.”
Institutions try to allay these fears. “There was strong political opposition to joining the euro, even from parties that were within the government coalitions, but we knew how to redirect the economic situation by raising salaries and pensions and developing a plan to reduce the deficit to 2% and contain inflation,” argues Asen Vasilev, former Minister of Finance on three occasions since 2021 and in charge of preparing the country’s entry into the euro. “With the euro you get low interest rates, lower risk in investments; in transaction costs we are going to save around one billion euros a year, since 60% of our exports and imports come from the eurozone,” adds Vasilev, current leader of the opposition for the Let’s Continue the Change party (center-left), in coalition with Democratic Bulgaria.
One of the elements that has flourished due to the currency exchange is the greater visibility of black money. “If you look at the amount of cash in circulation, coins and banknotes in circulation decreased in one year by 7.5 billion euros; and between Christmas and New Year, more than 500 million entered the banking system,” says the former Minister of Finance. The real estate market has also absorbed an important part of that submerged money. “A home costs 50% more than beforesince many people thought that it was time to acquire it in case prices skyrocket with the euro, so that essentially a large part of that money went through there and the rest in the banking system,” concludes Vasilev.
