Bulgaria wants Euro as parallel currency, begins talks with EU Commission

The new Bulgarian government has started negotiations with the European Commission to introduce the euro as a parallel currency to the Bulgarian lev as early as 2024, Finance Minister Asen Vasilev announced on Wednesday.

Bulgaria changed its initial target to join the Eurozone from 1 January 2024 to 1 January 2025 as the previous parliament’s high inflation and lack of political will blocked the process. However, a referendum calling to postpone adoption to 2043, called by the radical pro-Russian party Vazrazhdane, may become an obstacle.

The new government in Sofia is supported by the pro-European anti-corruption parties We Continue the Change and Democratic Bulgaria, as well as the GERB party of longtime former prime minister Boyko Borissov, which also lobbies in favour of the euro.

If the European Commission and the European Central Bank give permission, Bulgaria will be able to allow its citizens to choose to deal in euros or levs. Such a mechanism is already implemented by Montenegro and Kosovo, which both use the euro without being a member of the EU and the eurozone.

“You know that in Bulgaria at the moment, companies can carry out transactions in euros. But individuals do not have the right to carry out transactions in euros, nor do we have the right to receive our salaries in euros,” said the finance minister, as quoted by Mediapool.bg.

“We know that there are countries such as Montenegro, which actually allows a voluntary principle for these transactions to be carried out. If two citizens want and can carry out transactions in euros, they should be allowed to do so without the state restricting them. At the moment, transactions between citizens and final sales in euros are carried out only in levs”, he added.

The Bulgarian government is negotiating to allow retail prices of goods in the country to be announced at both prices and for the buyer to decide in which currency to pay. This means that Bulgaria will enter the Eurozone even before this happens administratively, but without having a voice in decision-making by the European Central Bank.

The We Continue Change party, the biggest party in government sees Bulgaria’s entry into the visa-free Schengen area and the Eurozone as political insurance to limit possible harmful consequences for the country if pro-Russian parties succeed in taking power.

Currently, Bulgarian businesses lose €750 million per year in fees for currency conversion and transfer to banks in the eurozone – a sum which for Bulgaria amounts to an important 0.4% of the country’s GDP.

(Krassen Nikolov | EURACTIV.bg)