Bulgaria is set to join the euro zone. But its citizens aren't convinced

Bulgaria is acceptable to go the 21st subordinate of the euro portion aft receiving motion disconnected from the European Commission and European Central Bank past week — but not everyone is convinced the determination is simply a bully idea.

Bulgaria's Prime Minister Rosen Zhelyazkov, subordinate of the center-right GERB party, has made joining the euro portion a priority, arguing that it would boost economical stableness and growth.

However, fears of higher prices and a nonaccomplishment of independency person stoked nationalist-party fueled protests against the country's euro ascension. A caller European Union survey showed that half of Bulgaria's colonisation is against adopting the euro.

Economists and experts weighed successful connected the imaginable risks to Bulgaria joining the euro, outlining what the eastbound European state could suffer and summation from the move.

"The astir contiguous interest is simply a spike successful prices during the currency switch, arsenic immoderate businesses whitethorn circular up prices. Many Bulgarians interest that eurozone rank could erode their purchasing power, particularly successful poorer agrarian areas," Valentin Tataru, an economist astatine ING who covers Bulgaria, told CNBC.

Nevertheless, helium besides noted Bulgaria's currency has agelong had a fixed speech complaint to the euro and therefore, "the transitional ostentation bump should beryllium mild."

The 2nd cardinal interest is what giving up Bulgaria's currency, the lev, volition mean for the country's independency and sovereignty — ideals for which it has go symbolic according to Andrius Tursa, cardinal and eastbound Europe advisor astatine Teneo.

"Its replacement with the euro whitethorn beryllium perceived by parts of the colonisation arsenic a nonaccomplishment of nationalist control," helium told CNBC. In summation determination are concerns astir relinquishing power of monetary argumentation arsenic countries successful the euro portion are taxable to decisions by the ECB, Tursa added.

The Bulgarian National Bank (BNB) would for illustration nary longer solely beryllium liable for mounting the country's involvement rates based lone connected however its idiosyncratic system is developing.

However, "eurozone countries payment from little involvement rates owed to the credibility of the ECB and reduced currency risk," Tursa pointed out. Lower involvement rates typically payment borrowers arsenic loans and mortgages go much affordable.

Joining the euro portion and securing oversight from the ECB could boost economical stableness and maturation prospects for Bulgaria, Jasmin Groeschl, elder economist for Europe astatine Allianz SE, told CNBC.

Foreign concern could for illustration increase, she suggested, and the country's gross home merchandise would beryllium expected to beryllium boosted by euro portion membership.

"Deeper fiscal integration would fortify Bulgaria's fiscal strategy nether the ECB's oversight, enhancing monetary stability," Groeschl explained. "Adopting the euro would fortify Bulgaria's ties with the EU, enhancing its power and credibility," she added.

Key areas that underpin the system similar commercialized and tourism could besides beryllium supported, Teneo's Tursa said.

Many of Bulgaria's cardinal trading partners are successful the EU, with astir of its exports going to members of the 27-state bloc successful 2023 according to data from the country's statistic office. Key sectors see machinery and transport equipment, manufactured goods and food.

Tourism has meantime go a large contributor to the system arsenic Bulgaria positions itself arsenic some a summertime and wintertime destination. Over 13 cardinal foreigners visited the state successful 2024, authoritative statistics showed.

"Bulgaria's accession to the eurozone would facilitate commercialized and tourism flows with different eurozone countries by eliminating the costs and load associated with currency conversion," Tursa said, adding that this would beryllium peculiarly important owed to Bulgaria's beardown integration into EU proviso chains.

One hazard flagged by the economists and analysts are the governmental tensions surrounding Bulgaria's euro adoption.

"Public absorption to euro adoption has already triggered notable protests, and successful the mean term, the contented could go a cardinal operator of rising enactment for populist and Euroskeptic governmental movements," Teneo's Tursa explained.

But contempt section protests and concerns astir euro portion ascension, astatine slightest successful the agelong word the benefits for the state outweigh immoderate negatives, Allianz SE's Groeschl argued.

"The trade-off involves losing immoderate economical autonomy successful speech for deeper integration," she said. "Although Bulgaria would suffer immoderate monetary argumentation power and beryllium taxable to strict fiscal rules, the advantages of greater economical stability, reduced transaction costs and stronger integration with the EU marketplace would typically outweigh these disadvantages."

ING's Tataru struck a akin tone, saying that due to the fact that the lev is already tied to the euro, determination should not beryllium a large shock.

"Joining the euro is 1 of the astir strategical steps Bulgaria tin instrumentality to unafraid semipermanent prosperity and deeper European integration," helium said.