Bulgaria next in line to introduce the euro

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Bulgaria may miss 1 January 2025 euro adoption date: https://www.politico.eu/article/bulgaria-pm-hints-country-miss-eurozone-entry-date-nikolay-denkov/

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In the meantime Sir Rowland Hill has already started pre-orders.

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Bulgaria's Euro Adoption Likely Postponed: Entry Date Shifts to Second Half of 2025

Bulgaria's long-anticipated entry into the Eurozone may face a delay, as the country is unlikely to meet the inflation criterion required for the introduction of the euro on January 1, 2025. Dimitar Radev, the Governor of the Bulgarian National Bank (BNB), disclosed to BTA that a more plausible scenario for Bulgaria's integration into the Eurozone would be later in 2025.

This revelation comes as part of a broader discussion within Bulgaria's financial and business circles. The Bulgarian Chamber of Commerce, represented by Stanislav Popdonchev - Deputy Chairman of the BCC, was involved in an interdepartmental working group tasked with drafting the Law on the introduction of the euro. Popdonchev shared insights with BNR, shedding light on the evolving timeline for Bulgaria's euro adoption.

"The original target date of January 1, 2025, was reevaluated due to concerns that Bulgaria may not meet the inflation criterion by the release of the regular convergence report in June this year. As a result, alternative dates for entry, notably March 1 or July 1, 2025, are now under consideration," explained Popdonchev.

Highlighting the significance of the entry date for businesses, Popdonchev emphasized the need for ample preparation time. "Businesses require between 6 and 8 months to adjust their operations for euro transactions, encompassing fiscal devices, internal software, and procedural adaptations," he stated.

A key aspect of this adjustment involves updating the software of fiscal devices utilized by businesses, including cash registers, which number over 350,000. Popdonchev underscored the importance of amending Ordinance N18 to facilitate software updates, which are estimated to cost between BGN 44 and BGN 100 per device.

While the transition to the euro necessitates comprehensive preparations, Popdonchev reassured that businesses may not need to invest in entirely new fiscal devices, provided that software updates suffice. However, any potential need for new devices would depend on the extent of software changes.

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Euro accession: Bulgarian National Bank blames government for delay

Bulgarian National Bank Governor Dimitar Radev blames the delay in adopting the euro on the Bulgarian governments in power since 2020. However, joining the eurozone in 2025 is still realistic, explained Radev.

Bulgaria's first stated goal was to adopt the euro on January 1, 2024, but the country has failed to pass the necessary laws and rising inflation has become an additional obstacle.

According to Radev, who has been governor of the Bulgarian National Bank (BNB) since July 2015, Bulgarian politicians have so far shown a "hesitant and in some cases even contradictory attitude towards the eurozone, which is the main obstacle" to the introduction of the euro in Bulgaria. "Bulgaria needs above all a clearly defined, sustainable, pro-European political construct. This was missing after our entry into the European Monetary Mechanism and the Banking Union," Radev said on Tuesday at an international conference on Bulgaria's entry into the euro zone.

He recalled that the lack of political will of the ruling majority in Sofia had delayed Bulgaria's application for eurozone membership in 2021 for at least a year. The national plan for the introduction of the euro was not adopted in time. Radev also pointed out that the previous government under Nikolai Denkov, which was overthrown in April, had a clear pro-European platform, but was politically extremely unstable.

Whether Bulgaria will introduce the euro in 2025 depends on the politicians in Sofia. "The top priority is to restore political contacts at the highest level. We must not forget that Bulgaria's entry into the Eurozone is a political process and a political decision. Unfortunately, contacts on this issue in recent years have been more protocol-based than substantive," Radev said.

He called for the law introducing the euro to be passed as quickly as possible amid the ongoing political crisis. Bulgarians go to the European elections on June 9th and the sixth parliamentary elections in three years. According to Radev, the law will help the state and municipalities adapt to the euro, while the BNB and commercial banks will be ready for the introduction of the euro before the end of 2024. "If this scenario occurs as soon as possible after the elections, Bulgaria's chances of joining the Eurozone in 2025 remain good and quite realistic," said the BNB governor.

The pro-European parties in Sofia see membership in the eurozone as the end of Bulgaria's full political integration, which would make it impossible for right-wing nationalist and pro-Russian forces to remove the country from the EU. "As a result of the political crisis of recent years, we have lost both initiative and leadership in the process of joining the Eurozone. Nevertheless, our will is unbroken. To complete the process successfully, we need a sustainable pro-European political construction," said Radev.