Bulgaria joins the Euro amid political turmoil and protests

Bulgaria became the 21st euro area member, lauded as a symbol of European collaboration

Thu, 01 Jan, 2026 - 10:37

European Central Bank President Christine Lagarde said Bulgaria joining the euro area on Thursday is a testament to Europe’s ability to collaborate and defy international headwinds.

“The euro is a powerful symbol of what Europe can achieve when we work together, and of the shared values and collective strength that we can leverage to confront the global geopolitical uncertainty that we face at the moment,” she said, welcoming the currency’s 21st member.

The Balkan nation of 6.4 million people just completed its economic transformation and became the latest country to join the world’s biggest currency zone. It also means the ECB Governing Council increases to 27 policymakers, with Bulgarian Central Bank Governor Dimitar Radev joining the ranks of rate setters.

“The euro isn’t merely an economic decision; it isn’t just a currency,” Radev said in a video address. “It is a sign of belonging – that your place is not on the periphery, but within a space of shared rules, trust, and responsibility. A sign that the effort you have made has been recognised and accepted.” The Bulgarian governor has already been attending ECB gatherings as an observer, and his initial meetings as a full member are unlikely to see much disagreement over monetary policy. The ECB hasn’t cut rates since June, and markets and most economists predict that the period of rate cuts is now over.

Policymakers expect rates to remain at 2% for some time unless there are significant new developments, and a few have hinted that the next move — albeit far off — will be a hike.

What’s also conspicuous is the predicament that Bulgaria finds itself in as it adopts Europe’s single currency this week. The government just resigned, it has no up-to-date budget, and almost half the population wants to keep the lev.

The switch is meant to crown almost two decades of integration after Bulgaria joined the EU and then finally its Schengen customs-free travel zone. The European Central Bank’s main building in Frankfurt has been illuminated to mark Thursday’s transition, the latest accession since Croatia joined in 2023 and taking the number of countries with the currency to 21.

But popular anger over corruption, cronyism and a persistent failure to get a viable government has cast a pall over progress.

Protests in November against the government’s proposed tax and spending plans turned into the biggest display of unrest in more than a decade. By mid-December, the prime minister had quit, and party leaders said an eighth election in five years was now the most likely outcome.

The EU has repeatedly criticised Bulgaria’s failure to improve rule of law and its low efficiency in probing high-ranking officials for corruption. But, unlike in Hungary, Poland or Slovakia, pro-EU parties have dominated the political scene in Bulgaria, affording them some protection.

“The euro will bring benefits for the Bulgarian people making payments and travel easier,” European Commission President Ursula von der Leyen said in a statement. “It will bring new opportunities for Bulgarian businesses, allowing them to seize better the advantages of our common single market.” In celebration of Bulgaria’s accession to the euro area, the ECB will illuminate its headquarters for the first 11 days of 2026.

Bloomberg