One of the poorest countries in the European Union (EU), Bulgaria is suffering greatly over the introduction of the euro.
The Bulgarian government has set a goal to become the 21st member of the eurozone (20 countries using the euro) as early as January next year.
However, half of the Bulgarian people oppose the government's plans to abandon the Lev, the national currency used for 144 years.
Bloomberg reported on the 1st (local time) that large-scale protests against the withdrawal of the Lev and the introduction of the euro are intensifying in Sofia, the capital of Bulgaria, and major cities.
On the 4th, the European Central Bank (ECB) and the EU Commission will publish a report determining whether Bulgaria is eligible to join the eurozone.
Bulgaria is said to have largely met the membership criteria required by the eurozone.
As the likelihood of the EU accepting Bulgaria as a eurozone member increases, protesters have raised their voices, saying, "The Lev is a symbol of sovereignty" and that the decision on the euro's introduction should be put to a national referendum.
The Lev means 'lion' in ancient Bulgarian. This currency was born along with the formation of the modern Bulgarian state. Despite undergoing three currency reforms amid great turmoil through monarchy, communist regime, and democratization, its name has never changed.
For this reason, the love Bulgarians have for the Lev is immense. The nationalist third party Vazrazhdane, which is leading the opposition protests, said, "Protecting the Lev is the last battle to protect Bulgaria," appealing to its political base on nationalist sentiments. For them, the Lev is a rarely unchanged entity in the tragic history of Bulgaria. This emotional resentment against seeing such currency disappear into history is also a significant obstacle to the introduction of the euro.
According to this month's regular EU opinion survey, half (50%) of Bulgarians opposed the introduction of the euro, while only 43% supported it. Notably, in response to the question, "Do you support the introduction next year?" only 21% agreed.
Among them, there is a prevalent anxiety that if the Lev is replaced by the euro, their already low purchasing power will decrease even further.
Bulgaria joined the EU in January 2007. However, its income level lags significantly behind other EU countries. The average gross domestic product (GDP) per capita in Bulgaria just barely exceeded $10,000 in 2020. According to the EU statistical agency Eurostat, Bulgaria's GDP per capita as of 2023 is at 64% of the EU average, still ranking among the lowest in Europe.
Bulgaria's manufacturing base is not very strong. Agriculture and food exports are major industries. The Bulgarian government stated that using the European single currency, the euro, would reduce intra-regional trade expenses and favor export-led economic growth.
Bulgaria's Minister of Finance, Petkov, noted, "The introduction of the euro will prevent Bulgaria from being sidelined in the EU decision-making process and will enhance growth potential by integrating into the EU economic sphere," adding that "as of February, we have met all membership conditions except the inflation rate criterion."
Experts also project that the benefits Bulgaria would gain from joining the eurozone outweigh the disadvantages.
The Bulgarian National Bank (BNB) has maintained a 'partial currency sovereignty' status, unable to implement independent monetary policy for over 25 years. Bulgaria has been pegging the Lev to the euro at a rate of 1.95583 Lev per euro since 1997. Thus, it is hard to see the loss of currency sovereignty as something newly arising from joining the eurozone.
According to the political media Politico, the ECB and the European Commission said that Bulgaria could escape exchange expenses and exchange risk (unforeseen losses due to exchange rate fluctuations) if it joins the eurozone.
It is also expected that positive effects such as enhancing intra-regional trade and investment, improving national credit ratings, and stabilizing the financial system will arise.
The Croatian National Bank (HNB) assessed in a report last year that the impact of the euro's introduction on inflation was minimal and temporary following the introduction of the euro in January 2023. The Croatian government has implemented strong measures such as dual pricing and monitoring of unfair price increases to curb inflation after the euro's introduction.
Slovakia, which joined the eurozone in 2009, saw an initial surge in prices, but in the long run, it enjoyed a significant increase in trade volumes. The Baltic states also experienced a boost in economic growth to EU average levels after Estonia joined the eurozone in 2011, Latvia in 2014, and Lithuania in 2015.
Bloomberg quoted experts as saying that "Bulgaria's accession to the eurozone has geopolitical implications beyond just economic issues, aimed at distancing the countries of the Western Balkans from Russian influence."