On Thursday 1 January 2026, Bulgaria officially became the twenty-first member of the euro area (see EUROPE 13745/11) against a backdrop of public fears about inflation which, combined with public exasperation regarding corruption, toppled Rosen Zhelyazkov’s conservative government in December.
“I warmly welcome Bulgaria to the euro family and Governor Radev to the ECB Governing Council table in Frankfurt”, declared Christine Lagarde, President of the European Central Bank (ECB), in a statement published at the start of the year. “The euro will bring benefits for the Bulgarian people by making payments and travel easier. It will bring new opportunities for Bulgarian businesses, allowing them to seize better the advantages of our common single market”, assured the President of the European Commission, Ursula von der Leyen.
In January, the euro will gradually replace the Bulgarian lev (conversion rate: 1.95583 lev for 1 euro), with shops obliged to accept the old Bulgarian currency and give change in euros. The display of prices in both currencies will remain compulsory until next August.
In response to concerns about inflation, the Commission points out that the prices of 101 everyday consumer products are monitored on a daily basis on a website run by the consumer protection agency. Following a rate of 3.5% in 2025, inflation in Bulgaria could be at 2.9% in 2026 and 3.7% in 2027, according to the Commission’s autumn 2025 economic forecasts.
ECB. It should be noted that with Bulgaria’s adoption of the euro, a new system for rotating voting rights within the Governing Council came into force, as indicated in this timetable.
To see the rotation of voting rights in the Governing Council: https://aeur.eu/f/k62
ESM. Bulgaria’s membership of the ‘European Stability Mechanism’ (ESM), the euro area’s permanent rescue fund, will be phased in over the first half of the year, once the Bulgarian authorities have ratified the intergovernmental treaty establishing the ESM.
Concerning the country’s subscription to the paid-in capital of the ESM, Bulgaria will benefit from a twelve-year correction period during which its contribution will amount to around €600 million (payment in five annual instalments). At the end of this correction period, it will pay the remaining amount to reach €992 million.
Banking Union. Bulgaria is now a full member of the Single Supervisory Mechanism (SSM) within the banking union. The ECB is therefore responsible for the direct supervision of four major Bulgarian banks - United Bulgarian Bank, DSK Bank, Eurobank Bulgaria and UniCredit Bulbank - and, in cooperation with the Bulgarian supervisor, for the supervision of seventeen less systemically important institutions.
The Bulgarian National Bank paid in the remainder of its contribution to the capital of the ECB (almost €106 million, or 0.9% of the total) and transferred its contribution to the foreign reserve assets of the ECB. The Frankfurt Monetary Institute will shortly publish the list of credit institutions and branches of credit institutions established in Bulgaria and subject to the minimum reserve system.
Finally, on the financial front, the Bulgarian securities market has joined the Eurosystem’s TARGET Services, which ensure the free circulation of liquidity, securities and collateral throughout Europe (T2, T2S, TIPS, ECMS). (Original version in French by Mathieu Bion)