[ad_1]
As of January 1, 2026 Bulgaria a new currency: the euro. The country joins the eurozone as the 21st member. The European currency will be introduced in a country shaken by political turbulence – there is a lot at stake for the EU as well as for Bulgaria. It wasn’t until the beginning of December that the government had to do so after weeks Protests by mostly younger people resign. The demonstrators’ accusation is that the government’s draft budget for next year is concealing corruption in the country. The government has only been in office since January 2025, and now the eighth parliamentary elections in four years are coming up.
But despite that corruptiondespite the politically shaky situation, Bulgaria’s economy is growing surprisingly strongly. In 2025, gross domestic product increased by 2.5 percent, while the euro zone only averaged 0.9 percent. However, growth is building at a low level and Bulgaria remains the poorest country in the EU. The road to joining the euro was also rocky. Bulgaria actually planned to introduce the euro in 2024, but the inflation rate was still 5.1 percent and was therefore above the limit permitted for accession. For accession candidates, this is 1.5 percentage points above the average of the three EU states with the most stable prices. In June 2025, inflation was only 2.7 percent – and so nothing stood in the way of the introduction of the euro, even if the rate recently rose again to over 5 percent.
In order to make it into the European Monetary Union, the former socialist country greatly reduced national debt through strict fiscal discipline. In 1999, debt was almost 80 percent of gross domestic product. In 2010, this debt ratio reached its lowest level ever of 14.06 percent. Bulgaria is now one of the euro countries with the lowest rate, currently 23.9 percent of gross domestic product.
By joining the euro, Bulgaria will send a representative to the Council of the European Central Bank, the body that decides monetary policy. Germany is likely to find an ally in the country for a stricter monetary policy in the event of disputes, because Bulgaria does not have to insist on low interest rates for budgetary reasons due to its low debt ratio. The Bulgarian central bank president, Dimitar Radev, who will most likely take on this task, has been in office since 2015.
Conversely, Germany is an important trading partner of Bulgaria. Many German companies have settled in the country; in 2022, 3,600 companies with German participation were based in Bulgaria. For some of these companies, Bulgaria is the gateway to the Balkan region – and it offers them good conditions for this: the country is part of the Schengen area, so there is freedom of movement for people. The costs for staff, rooms and energy are low. With a flat corporate tax of ten percent, there is a lot of money left over for investments.
The euro now makes it a little easier for investors from the euro area to pursue business there and finance the country’s recovery. However, this will only work as long as the donors are not deterred by corruption and political turbulence.
[ad_2]
