Bulgaria joins eurozone amid expectations, adjustments

A citizen holds Bulgarian lev cash to make a payment in Sofia, Bulgaria, Dec. 31, 2025. Bulgaria joined the eurozone and adopted the euro as its official currency on New Year's Day, becoming the 21st member of the euro area. (Xinhua/Peng Ziyang)

Officials and economists say accession opens a new chapter for the country, one defined by deeper integration alongside fresh economic tests.

SOFIA, Jan. 11 (Xinhua) -- In the first minutes of 2026, a three-dimensional euro symbol lit up the facade of the Bulgarian National Bank in Sofia. At the same moment, the headquarters of the European Central Bank in Frankfurt were illuminated in a synchronized display, marking Bulgaria's formal entry into the eurozone.

"The introduction of the euro is the final milestone in Bulgaria's integration into the European Union," Bulgarian President Rumen Radev said in his New Year's address.

For Sofia, the moment represented far more than a currency change. Bulgaria joined the European Union in 2007, but spent the following 19 years working to meet the eurozone's fiscal, inflation and institutional criteria.

Officials and economists say accession opens a new chapter for the country, one defined by deeper integration alongside fresh economic tests.

The governor of the Bulgarian National Bank will now sit on the European Central Bank's Governing Council, taking part in decisions on eurozone interest rates and monetary policy.

Vegetables are labeled with prices in both euros and Bulgarian lev at a market in Sofia, Bulgaria, Dec. 31, 2025. Bulgaria joined the eurozone and adopted the euro as its official currency on New Year's Day, becoming the 21st member of the euro area. To ensure a smooth transition to the new currency, throughout January, the Bulgarian lev will remain in circulation alongside the euro. Starting Feb. 1, the euro will become the country's sole legal tender. (Xinhua/Peng Ziyang)

European Central Bank President Christine Lagarde welcomed Bulgaria in a video address, calling the euro "a powerful symbol of what Europe can achieve when we work together," especially at a time of heightened global geopolitical uncertainty.

Supporters of the single currency say that the symbolic gain is matched by tangible economic benefits. Tourism is widely expected to be among the first sectors to feel the impact.

"Tourism is one of the immediate positive effects expected," said Lyubomir Kyuchukov, director of the Sofia-based Economics and International Relations Institute. "Eliminating the necessity to change money will affect millions of tourists, making the country more attractive. There are already indications that bookings for 2026 will exceed previous years."

The government hopes 2026 will mark a breakthrough year for cultural tourism and mountain destinations, Tourism Minister Miroslav Borshosh said.

Beyond tourism, euro adoption is expected to support broader economic activity. While Bulgaria still faces a shortage of qualified labor and relies on imported workers, some young Bulgarians educated abroad are starting to return, Kyuchukov said, adding that the high-tech sector, particularly software development, is showing dynamic growth.

Economists also point to longer-term benefits. Jasmin Groeschl, an economist at Allianz Group, said euro adoption would facilitate trade with other EU members by reducing transaction costs and strengthening investor confidence.

Visitors line up to taste food at the International Food Exhibitions 2025 in Sofia, Bulgaria, Nov. 12, 2025. The four-day event kicked off here at the Inter Expo Center on Wednesday, bringing together five exhibitions dedicated to the food and beverage, meat, dairy, bakery, and wine industries. (Photo by Marian Draganov/Xinhua)

Bulgarian banking authorities estimate that adopting the euro will lower financing costs, save more than 1 billion Bulgarian lev (595.2 million U.S. dollars) annually by eliminating currency conversion, and unlock around 15 billion lev in central bank reserves previously held to defend the national currency.

Within the European Central Bank framework, Groeschl said, closer financial integration should strengthen the resilience of Bulgaria's banking system.

Analysts expect large companies and exporters to benefit most from reduced currency risk and easier access to capital, while smaller, domestically focused firms may face adjustment challenges.

"For small businesses with national outreach, it is less probable," Kyuchukov said, noting that agricultural producers in particular are concerned about stronger competition once prices and costs fully align with the eurozone.

Some economists caution against inflated expectations. While Bulgaria will become more tightly integrated into European supply chains, foreign direct investment inflows may increase only modestly rather than surge, said Dinko Dinkov, professor of international relations at Bulgaria's University of National and World Economy.

Visitors take photos during the rose picking ceremony in Kazanlak, Bulgaria, June 8, 2025. The 2025 Rose Festival was held in Kazanlak, Bulgaria. The festival has been organized since 1903. (Xinhua/Lin Hao)

There is also concern among experts that adopting the euro will reduce the country's own economic "adjustment valve." "This also limited possibilities for more massive public investments," Kyuchukov said.

Admitting a new member at a time when the eurozone itself is grappling with challenges nevertheless sends a positive signal about the credibility of the European Central Bank, he added.

"However, it might also be the last expansion for years to come, as none of the remaining six non-euro EU states have declared ambitions to join in the near future," Kyuchukov said. (1 Bulgarian lev = 0.595 U.S. dollar)