Euro concerns: Is there any risk of another currency course when taking the euro area

Here I publish the answers to some of the questions and concerns that have been shared with me about Bulgaria's admission to the euro area. The questions are in several groups. Priority I respond to Group A – Personal Finance. After covering the current questions in this group, I will draw attention to Group B – macroeconomic stability.

It may be a surprise to many, but one of the questions I received repeatedly is this:

Answer:

Keeping the current exchange rate (1 EUR = 1.95583 BGN) at the entry of Bulgaria into the euro area is guaranteed by several key factors:

1/ The mechanism of the currency board – Bulgaria has operated with a currency board since 1997, with the lion fixed to the euro (originally to the German brand). Legally, all levs in circulation are fully secured with currency reserves in euro. Ie There is no technical reason or reason to do any devaluation of the lev.

2/ The legal framework – the legislation in Bulgaria provides that the lion will be replaced with the euro in this course. In the process of joining the euro area, a law is adopted, which formally confirms the fixed course. Only through a political decision of parliament can be changed this courseS But such a decision would be tantamount to refusing membership in the euro area, because it will change the Bulgarian legal framework needed to premise Bulgaria in the Monetary Union. Ie If the question is « Is there a risk of another course when taking the euro area? », The answer is « no » because these are two conditions that cannot be true at the same time.

3. The officially agreed course with the European Central Bank (ECB) is 1.95583 BGN for EUR 1. Ie The euro area membership itself guarantees the course and eliminates the risk of Bulgarian politicians to decide to change it.

Some of the worries are likely to arise from the ambiguity of exactly how people will exchange their money. Will they pay a commission or lose value from the difference between the official course and the one by which they exchange the levs?

The Bulgarian National Bank was given to these questions. Here are some of them:

– From the date of Bulgaria's membership in the euro area, all types of accounts will be single, automatic and free of charge in euro. From the very first day of the euro acceptance, the account holders will only be able to withdraw from their lev bills, whether the withdrawal will be via ATM/POS or in a bank office.

– From the date of introduction of the euro when withdrawing cash through self -service machines, including ATM terminal devices, only Eurobanknotes are distributed.

– During the first six months from the date of introduction of the euro in Bulgaria, banks are obliged to exchange free of charge, in unlimited quantities of banknotes and coins from levs in the euro at the official exchange rate.

– In settlements where there are no offices of a bank, during the first six months from the date of introduction of the euro « Bulgarian Post » EAD will exchange free banknotes and coins from BGN in the euro at the official exchange rate. Restrictions of BGN 1000 per day for one person without request; 10,000 BGN per day for one person with a request.

– The Bulgarian National Bank exchanges free of charge, in an unlimited quantity and without restriction over time banknotes and coins from levs in euro at the official exchange rate.

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This is a personal initiative with a period of June 1, 2025. It has not been ordered, has not been paid and you do not owe a fee or fee to me. It is not a debate or discussion, but answers questions and concerns. To make sure I will see your question, please ask it in a personal message to me. I am committed to posting questions and answers.