Bulgaria Adopts Euro in Final Day of 2025

Bulgaria officially transitioned to the euro (€) currency at midnight local time on Wednesday, December 31, 2025, marking its formal induction as the 21st member of the Eurozone. This economic integration extends the single currency area to the Black Sea region, bringing the total number of users to over 350 million. The irrevocable conversion rate was fixed at 1 euro to 1.95583 Bulgarian lev (BGN), a rate maintained since an informal peg in 1997 and formally since joining the Exchange Rate Mechanism (ERM) II in July 2020.

The country achieved this milestone after meeting the convergence criteria, including reducing inflation to 2.7% in 2024, and securing final approval from the Council of the European Union on July 8, 2025. However, the transition was significantly complicated by severe domestic political instability. The minority pro-EU coalition government, led by Prime Minister Rosen Zhelyazkov, resigned on December 11, 2025, following weeks of anti-corruption protests that broadened beyond initial budget disputes to calls for governmental reform.

Consequently, Bulgaria entered the new currency era under an interim administration with no approved budget for 2026, facing the prospect of its eighth general election in five years. Public apprehension focused on potential price increases, a concern amplified by November 2025 food price inflation that had already risen 5% year-on-year, more than double the eurozone average. While European Central Bank (ECB) officials projected a modest inflationary impact of 0.2% to 0.4%, citizens expressed mixed feelings, with some anticipating long-term prosperity and others fearing immediate cost-of-living pressures relative to the average late-2025 net wage of approximately €1,300.

Analysts noted the complex interplay between the economic achievement and the political fallout. Petar Ganev of the Institute for Market Economics suggested that the government's collapse sent a signal of uncertainty to foreign investors, potentially offsetting the positive signal of euro adoption. Ganev argued that while eurozone membership offers an anti-corruption mechanism, it cannot resolve the nation's chronic political fragmentation. The move is strategically important for solidifying Bulgaria's pro-Western alignment and limiting strategic external influence, as stated by Economy Commissioner Valdis Dombrovskis.

Logistically, a one-month dual circulation period concluded on January 31, 2026, though the Bulgarian National Bank (BNB) committed to exchanging lev banknotes for euros free of charge through commercial banks until at least March 2, 2026, with the BNB offering unlimited exchanges thereafter. Ending 2025 with over 3% economic growth and a GDP of 113 billion euros, Bulgaria remains the EU's poorest member state, making the stability promised by the euro vital for its approximately 6.4 million residents.