Bulgaria’s eurozone accession: an economic milestone and a geopolitical tightrope

The European Commission and the European Central Bank (ECB) approved on Wednesday (4 June) Bulgaria’s accession to the eurozone as its 21st member, effective 1 January 2026. The decision, set to be finalised by eurozone finance ministers on 8 July, marks a significant step in Bulgaria’s EU integration.

“This is a historic moment for Bulgaria, the European Union, and the euro area,” said Valdis Dombrovskis, European Commission Executive Vice-President for the Economy. He described the euro as a symbol of EU unity, emphasizing its role in fostering economic stability.

Commission President Ursula von der Leyen echoed this sentiment, stating, “Adopting the euro will strengthen Bulgaria’s economy and bring benefits to both citizens and businesses.”

For Bulgaria, often labelled as “the EU’s poorest member state”, eurozone membership is seen joining the EU’s core, but also as a geopolitical anchor, securing its place at the heart of the EU amid persistent concerns about Russian influence.

Atanas Pekanov, former Bulgarian Deputy Prime Minister for EU Funds, spoke to EUalive, underscoring the economic and strategic benefits: “Bulgaria is completing today an important step in its EU integration. Being an euro area member will make Bulgaria stronger, will boost investments and will help it converge faster. It will strengthen its geopolitical position and embed it in the EU center”.

He reminded that Bulgaria has been in a currency board – a fixed exchange rate to the Deutsche Mark since 1997 and later to the euro, and therefore did not have an independent monetary policy.

“By joining the Euro area, we will be able to participate in the decisions taken by the Governing Council of the ECB and therefore we will be able to shape the monetary policy decisions regarding the second most important currency in the world – the euro. With today’s step, the Bulgarian economy will profit from lower transaction costs, higher reputation and therefore better credit ratings, it will also have a seat at the table of the Governing Council of the ECB”, Pekanov added.

With nearly 70% of Bulgaria’s exports destined for the EU, the elimination of currency exchange costs is expected to benefit its export-driven economy. The Bulgarian lev has been pegged to the euro at a fixed rate of 1.9558 since 2001 under a currency board arrangement, meaning the transition will formalize a long-standing economic reality.

Bulgaria’s inflation, a key hurdle, now meets the EU’s convergence criteria at 2.7%, just below the 2.8% reference value, according to the ECB.

Public scepticism and political tensions

Despite these advantages, public opinion remains deeply divided. Recent polls indicate that 55–60% of Bulgarians oppose or are hesitant about adopting the euro, primarily due to fears of price hikes. This scepticism is particularly strong outside major cities like Sofia, where pro-Russian narratives have gained traction in resent years.

The populist Vazrazhdane (Revival) party, which recently teamed up with Russia’s ruling United Russia party, has capitalised on these fears, staging disruptive protests, including a demonstration in Sofia on 4 June and provoking clashes in Parliament with the MP’s from pro-EU Democratic Bulgaria alliance.

Vazrazhdane leader Kostadin Kostadinov said during street protest: “First they’ll take our money, then they’ll take Bulgaria itself.” His party’s actions, including an attempt to occupy the parliamentary tribune, reflect a broader anti-euro campaign that has escalated tensions. In February 2025, the party targeted the EU’s representation in Sofia, with protests culminating in an arson attempt.

Last month president Rumen Radev, suspected of leveraging the unrest to bolster his political ambitions, called for a referendum to delay euro adoption. Though Parliament blocked the initiative, it underscored the fragility of Bulgaria’s pro-EU consensus.

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Boyko Borissov, leader of the ruling GERB party, countered that eurozone membership is essential to end Bulgaria’s “humiliating” exclusion from key EU decision-making forums.

“When EU Council meetings end, only eurozone countries remain (in the room). That’s where decisions are made and protesters wants Bulgaria to stay out (of that room)”, Borissov said, framing accession as a matter of national pride and influence.

Economically, Bulgaria’s eurozone entry is unlikely to fundamentally alter its landscape. The currency board has tethered the lev to the euro for over two decades, limiting monetary policy flexibility.

Experts argue that the primary economic benefit will be reduced currency exchange, particularly for exporters.

To address inflation fears, the government has launched measures to prevent speculative price hikes, including a website displaying reference prices for essential goods, an information campaign across 300 towns, and enhanced monitoring for cartel behavior. Under Bulgaria’s Competition Protection Act, companies found guilty of price fixing could face fines of up to 10% of their annual turnover.

Missed chance for pro-euro campaign

Bulgaria’s entry into the Exchange Rate Mechanism II (ERM II) in 2020 was a critical step toward euro adoption, but authorities failed to launch a robust public information campaign. This has allowed disinformation and populist narratives to flourish, particularly from Vazrazhdane.

MEP Radan Kanev warned that challenges are only in the beginning with the steps Bulgaria will take in the coming months.

“Propaganda will intensify, and attempts to destabilize the country will escalate. The government and pro-European opposition must address speculation and potential external market interference.”

A geopolitical tightrope

Bulgaria’s eurozone accession is as much a geopolitical maneuver as an economic one. For Sofia, adopting the euro signals an irreversible commitment to the EU, countering Russian influence in a region where hybrid threats – like disinformation, economic pressure, and political destabilisation – remain potent.

The government’s failure to counter anti-euro narratives has left it vulnerable to populist exploitation. The violent protests and parliamentary clashes highlight a polarized society, where economic arguments for the euro struggle against emotional appeals to national identity and sovereignty.

The ECB’s inclusion of Bulgaria in its decision-making processes will enhance its influence, but only if domestic stability holds. The government must prioritize transparent communication and robust enforcement against price gouging to rebuild public trust. Failure to do so risks fueling populist gains, potentially undermining Bulgaria’s EU trajectory at a time when regional stability is under strain.

“But the serious challenge for the government and the pro-European opposition is just beginning. Propaganda will not weaken, but will intensify. Attempts to destabilize the country will intensify. We can expect various provocations. First of all, numerous managerial and legislative decisions are ahead to prevent speculation and possible external interventions in the market”, Radan Kanev commented.

Caption: A man walks past a board with currency rates at an exchange office in Sofia, Bulgaria, 30 April 2025. Bulgaria’s current currency is the Bulgarian Lev (BGN), which has been in use since 1880. EPA/VASSIL DONEV