Rounded Prices in Euros to Hit Bulgarians' Pockets after Eurozone Entry

Finance | March 27, 2024, Wednesday // 17:10|  views


As Bulgaria inches closer to joining the Eurozone, concerns arise over the implementation of rounded prices in euros, potentially impacting citizens' wallets upon adoption of the single currency.

The Ministry of Finance has released a draft Law on the introduction of the euro in Bulgaria, revealing that rounded prices in euros will be enforced a month after the country transitions to the Eurozone. Initially, citizens will have the option to pay with both levs and euros during this transition period.

To prevent unjustified price hikes during the initial phase, merchants will face strict regulations, with fines ranging from BGN 400 to BGN 7,000 for violations. However, the effectiveness of monitoring and enforcing this restriction remains uncertain, raising questions about its practical implementation.

While the draft law outlines rules for currency conversion, specifying how prices should be adjusted from levs to euros, the transition to rounded prices may pose challenges for consumers. With no oversight after the first month, traders may opt to round prices in a manner that could lead to increased costs for consumers.

The restriction on merchants to unreasonably raise prices will only be valid for a month. In addition, it is not clear how the National Revenue Agency will prove that this month's increase is not due to justified economic factors in order to impose a fine. The new law contains rules for currency conversion, according to which, if a muffin now costs BGN 3, its price in euros should be 1.53 euros. But traders will not leave this price and deal with yellow coins. No later than a month after joining the Eurozone, when no one will be watching for unjustified price increases, traders will round up the prices. Someone might round the price of a muffin to €1.50, but probably most would round it to €1.60.

One month after Bulgaria's entry into the Eurozone, all goods and services will be displayed in both levs and euros for a period of 12 months. The exchange rate will be determined by the Council of the EU, utilizing the current fixed exchange rate of BGN 1.95583 per euro.

However, concerns persist regarding the potential impact of rounded prices on consumers' purchasing power and overall inflation. Citizens will be encouraged to report violations of pricing rules to the Consumer Protection Commission, highlighting the importance of vigilance in ensuring fair pricing practices.

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Tags: Bulgaria, euro, prices, currency


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