During a demonstration with Bulgaria, which entered the euro zone in Sofia on May 31, 2025, the Euro logo defeated the drums that disappeared in red on the drum head.
Nikolay Doychinov | AFP | Getty Images
Bulgaria is set to become the 21st member of the Eurozone after receiving a sign-off from the European Commission and the European Central Bank last week, but not everyone is sure the move is a good idea.
Bulgarian Prime Minister Rosen Zyazkov is a member of the central right GERB party, who claims to be a priority for joining the eurozone and will increase economic stability and growth.
However, fears about rising prices and loss of independence have encouraged nationalist party members against the country’s rise in euros. A recent European Union survey showed that half of Bulgaria’s population is opposed to the adoption of the euro.
Economists and experts have weighed heavily on the potential risks of Bulgaria joining the euro by outlining what Eastern European countries can lose and benefit from the movement.
Inflation and interest rates
“The most pressing concern is the surge in prices during the currency switch, as some companies could close the prices. Many Bulgarians worry that eurozone membership could erode purchasing power, especially in poor rural areas.”
Nevertheless, he also said that “transient inflation uplifts must be mild” because Bulgarian currency has long had a fixed exchange rate in the euro.
The second important concern is that the Bulgarian currency, LEV, refers to the ideals that it has become symbolic, according to Andrius Tursa, Teno’s central and Eastern Europe advisor.
“Replacing it with the euro could be perceived by some of the population as a loss of national control,” he told CNBC. There are further concerns that eurozone countries will abandon control of monetary policy as they will be subject to decisions by the ECB, Tursa added.
For example, the Bulgarian National Bank (BNB) will no longer simply set national interest rates based solely on how individual economies are developing.
However, “Eurozone countries benefit from lower interest rates due to the lower reliability of the ECB and lower currency risk,” Tursa noted. Lower interest rates usually benefit borrowers as loans and mortgages become more affordable.
Economic stability and power
Jasmin Groeschl, senior European economist at Allianz SE, told CNBC that joining the eurozone and securing surveillance from the ECB could boost Bulgaria’s economic stability and growth prospects.
For example, foreign investment could potentially increase, she suggests, and it would be expected that the country’s gross domestic product will be boosted by eurozone membership.
“Deeper financial integration will strengthen Bulgaria’s financial system under ECB surveillance and increase financial stability,” explained Groeschl. “Upending the Euro will strengthen Bulgaria’s relationship with the EU, improving its impact and reliability,” she added.
It can also support key areas that support the economy, such as trade and tourism, Teneo’s Tursa said.
Many of Bulgaria’s major trading partners are in the EU, and most of its exports will be sent to members of the 27-state bloc in 2023, according to data from the national statistics office. Key sectors include machinery and transport equipment, manufactured goods and food.
Tourism, meanwhile, has become a major contributor to the economy as Bulgaria is positioned as a destination for both summer and winter. Official statistics showed that over 13 million foreigners visited the country in 2024.
“Bulgaria’s subscription to the eurozone will promote trade and tourism flows with other eurozone countries by eliminating the costs and burdens associated with currency conversion,” Tulsa said, adding that this is particularly important due to Bulgaria’s strong integration into the EU supply chain.
Political tension
One risk flagged by economists and analysts is the political tension surrounding Bulgaria’s adoption of the euro.
“Public opposition to the adoption of the euro has already sparked significant protests, and in the medium term, this issue could be a key driver for growing support for populist and euro-skeptical political movements,” explained Teno’s Tulsa.
But despite local protests and concerns over the ascension of the eurozone, the country’s interests outweigh any negatives, at least in the long run, allegedly Groschul of Allianz-Ses.
“Trade-offs include losing economic autonomy in exchange for deeper integration,” she said. “Bulgaria loses its monetary policy control and is subject to strict fiscal rules, but the benefits of improving economic stability, reducing transaction costs and strengthening integration with the EU market typically outweigh these drawbacks.”
ING’s Tataru gave a similar tone, saying that there shouldn’t be any major shock as the LEV is already tied to the Euro.
“Participating in the Euro is one of the most strategic steps Bulgaria can take to ensure long-term prosperity and deeper European integration,” he said.
