Professor Steve Hanke: Bulgaria Should Keep Currency Board, Avoid Adopting the Euro

Professor Steve Hanke, who established Bulgaria’s currency board, emphasized that the country should maintain the current system, as it continues to work effectively. Speaking during a roundtable organized by the pro-Russian "Revival" party in Parliament, he argued that there was no need to replace the currency board with the euro, noting that it had helped stabilize the country during various crises. Hanke pointed out that Bulgaria is already "de facto" part of the eurozone, as the lev is essentially tied to the euro. He warned that switching to the euro could limit Bulgaria’s options in the event of economic instability, as leaving the eurozone would no longer be possible once the country adopts the currency officially.

Hanke also warned that adopting the euro would likely increase inflation, citing issues in other countries like Croatia and Greece. He emphasized that from both technical and political perspectives, joining the eurozone would be a mistake. According to Hanke, Bulgaria’s current monetary sovereignty allows it to adjust the currency peg if the euro faces challenges, a flexibility that would be lost by joining the eurozone. He also expressed concern that Bulgaria may not meet the necessary criteria to join the eurozone, particularly regarding inflation levels.

Kostadin Kostadinov, the leader of "Revival", echoed the concerns, pointing to the results of a failed referendum and a petition that gathered significant support against joining the eurozone. Kostadinov warned that adopting the euro would threaten Bulgaria’s financial independence and could damage the country’s sovereignty. He stressed that the struggle to preserve the lev was crucial for the survival of Bulgaria as a state and nation.

Participants in the roundtable, including economists, MPs, and members of civil organizations, shared concerns about the impact of euro adoption on the country’s economy. Hanke’s message to Bulgarians was clear: demand an independent expert report on the issue before any irreversible steps are taken.

Sources:

• BNR
• epicenter.bg