Bulgaria’s ruling coalition divided over euro adoption plans

Bulgaria’s ruling coalition divided over euro adoption plans
By bne IntelliNews May 30, 2022

Bulgaria’s There Are Such People (ITN), a member of the four-party ruling coalition, will seek a delay in implementation of the plan for euro adoption approved by the government a few days ago, saying that an analysis of the effects of euro adoption should be prepared first.

Bulgaria’s government has set January 1, 2024 as the date for switching to the euro. The country has already met all nominal criteria for euro adoption.

However, ITN and the pro-Russian Bulgarian Socialist Party (BSP), which is also a member of the ruling coalition are attempting to delay the process. They claim they do not oppose euro adoption but say it is unclear what the economic effects of such a move would be, Dnevnik news outlet reported on May 27. 

On May 30, three ITN MPs filed a motion of resolution that the plan, adopted by the government on May 27, should not be adopted before the approval of such an analysis by the parliament.

The analysis should cover the Eurozone’s main policies, Bulgaria’s economic and financial policy, the state of Bulgarian economy, the expected consequences from the euro adoption, benefits, costs, risks and challenges. It should also probe the effect of the euro adoption on other countries.

BSP has also objected to the adoption of the plan, also seeking an analysis of the effects of euro adoption on the local economy.

Finance Minister Assen Vassilev has said that the country has de facto already adopted the euro as its currency, the Bulgarian lev, is pegged to the European currency.

Bulgaria was accepted in the eurozone’s, waiting room, the ERM II mechanism, in July 2020 along with Croatia, but political instability has delayed Sofia’s plan to implement the euro with Zagreb in January 2023.

Earlier in May, the Croatian parliament adopted a law on switching to the euro on January 1, 2023. 

As of September 5 this year through 2023, prices will be displayed both in Croatian kuna and in euro. Through 2023, there will be no cost for exchanging kuna cash for euros.

The exchange of local currency bills to euro will be carried out in banks, post offices and the state Financial Agency. In the central bank, kuna can be exchanged for euro after 2023 as well.