Bulgaria adopts the euro, becoming the 21st member of the euro area

Bulgaria's adoption of the euro on January 1, 2026, marks its deep integration with the euro area through extensive trade and financial linkages.

The country, with a population of 6.5 million and GDP accounting for 0.7 percent of the euro area, already had approximately 70 percent of its government debt denominated in euro.

For over 25 years, Bulgaria's monetary policy was aligned with the ECB via a currency board maintaining a fixed BGN/EUR exchange rate.

This strong alignment and integration are expected to bring several economic advantages, including lower transaction and borrowing costs, increased foreign trade and investment, enhanced price transparency, and greater investor confidence.

The transition is also anticipated to reduce regulatory costs for banks and allow Bulgaria to participate in euro area decision-making.

The Council of the European Union formally approved Bulgaria's euro area accession on July 8, 2025, setting the conversion rate at 1.95583 levs per euro, consistent with its ERM II central rate.

While the costs and risks of euro adoption are largely one-off and minor, concerns about changeover costs and potential unjustified price increases remain.

To address these, Bulgarian authorities implemented measures such as enhanced price monitoring and a mandatory dual display of prices from August 8, 2025, to August 8, 2026.

Despite these efforts, public support for the euro remains relatively low due to fears of price hikes, a common pattern observed in previous euro changeovers.