Is Bulgaria’s Lev a Burden? Analysts Weigh in on Eurozone Integration

Bulgaria spends approximately a billion leva (half a billion euros) annually due to its decision to maintain its own currency, according to financial consultant Deyan Vassilev. On Nova TV, he noted that the currency exchange alone costs the country around 500 million leva each year, highlighting that this inconvenience hinders Bulgaria's integration within the European market. Vassilev described the Bulgarian lev as a "luxury" that the nation cannot afford.

He pointed out that the currency board was implemented as an emergency measure, and joining the eurozone would bring several advantages, including reduced interest rates on government debt. While Vassilev acknowledged that the country must avoid excessive deficits, he emphasized that Bulgaria's current deficit is below 3%, suggesting that a balanced budget would help prevent falling into debt. He also mentioned that many Eurozone countries do not meet inflation criteria.

Contrarily, Dimitar Sabev from the Institute for Economic Research at the Bulgarian Academy of Sciences disagreed with the notion that adopting the euro would spell disaster for Bulgaria. He explained that the lev operates under a currency board, a monetary system reminiscent of practices used by colonial powers in the 19th century. Sabev noted that approximately 30 billion leva circulate within this system alongside 72 billion leva in foreign assets, primarily in dollars and securities. He criticized the anti-euro sentiment as reflecting financial illiteracy or serving private interests. Sabev also stated that Bulgaria's declining population and low labor costs are partly a consequence of the currency board, asserting that the Corporate Commercial Bank would not have faced bankruptcy if Bulgaria had been part of the Eurozone.