Latvian MEP: Bulgaria Must Overcome Fear of Euro and Embrace Stability

Latvian MEP Ivars Ijabs from the "Renew Europe" group believes that Bulgaria’s plans to adopt the euro are a positive move, both for its citizens and its economy. Speaking to Club Z, he reflected on Latvia’s own experience of joining the eurozone and said that while fears and doubts are normal, the benefits eventually outweigh the skepticism.

Latvia adopted the euro in 2014, shortly after suffering through a deep economic crisis in 2009–2010, which saw the country lose nearly 18% of its GDP. At the time, Latvia had its own currency - the lats - pegged to the euro. Ijabs explained that for Latvia, entering the eurozone became a priority, as it brought much-needed currency stability. Despite the hardships of the crisis, a significant part of the population supported the euro precisely because of that.

As in any country, Ijabs noted, decisions about currency provoke strong emotions. National currencies often serve as symbols of sovereignty, especially among older generations. But once people start using the euro, they quickly recognize the practical benefits - lower bank fees, easier travel, and more seamless trade. For an open, export-oriented economy like Bulgaria’s, he believes the euro makes sense.

Ijabs pointed out that one of the main concerns the Bulgarian government must address is inflation. Many people associate euro adoption with rising prices. In Latvia, this concern was managed through a coordinated effort involving retail chains and utility companies to ensure a transparent and fair transition. The result: when Latvia adopted the euro in 2014, inflation remained modest - around 2-3% - and there was no significant price shock.

He was also candid about expectations. While some thought that adopting the euro would automatically boost foreign direct investment, this didn’t happen in Latvia’s case. Investments remained stable, and the more impactful event, Ijabs said, was Latvia’s EU accession in 2004, which solidified the country’s position within a larger economic bloc during turbulent times. The euro helped cement that stability after the crisis.

Opposition to the euro in Latvia came primarily from eurosceptics and fringe groups. While some Russian disinformation campaigns targeted the process with conspiracies about economic collapse, they failed to gain traction. According to Ijabs, the Russian-speaking population in Latvia was not uniformly opposed - many, especially the younger and well-integrated generation, embraced the euro's benefits like the rest of society. A few small parties resisted the change, but did not play a major role in public debate.

He also explained that Latvia’s constitution does not allow referendums on international treaties, which includes euro adoption. There was an attempt by a now-defunct left-wing party to initiate one, but it led nowhere. In contrast, Bulgaria is currently facing public protests and calls for a referendum, backed by President Rumen Radev.

European Commissioner Valdis Dombrovskis recently stated that support for the euro in Latvia had grown from 55% at the time of adoption to 82% today. Ijabs offered a more cautious view, citing the latest Eurobarometer data, which shows that 63% of Latvians think the euro is a good thing. Only 14% view it negatively - below the EU average - while about a quarter remain undecided. Importantly, no serious political force in Latvia now advocates for a return to the lats.

He acknowledged the sentimental value of the national currency. The lats held historic significance, being used between the World Wars and restored after Latvia’s independence from the USSR. But from an economic standpoint, the euro has brought undeniable convenience - especially for travel, online shopping, and cross-border trade. Latvia’s export growth has benefited significantly from being part of the eurozone.

Reflecting on the euro’s impact, Ijabs said it helped stabilize Latvia’s monetary policy, especially in the face of the crisis. The country chose not to devalue its currency, as others like the UK or Sweden might have done. Instead, Latvia went through a painful internal devaluation - cutting public spending and implementing austerity. It was during this period that many Latvians emigrated abroad. But the ultimate goal remained: joining the eurozone.

He stressed that the decision to adopt the euro was not an easy one. When Latvia joined, the eurozone itself was facing uncertainty - Greece was in turmoil, the euro was being questioned, and parties like SYRIZA were clashing with the European Commission. Latvia, however, wanted in. Ijabs recalled having to explain to even his own in-laws why the euro was the right choice, while Greece was hinting at leaving it.

Ijabs emphasized that the introduction of the euro is not just about politics, but about meeting specific criteria - public debt, deficit, inflation control. Latvia had to make tough budget decisions to qualify. While each Baltic state had its own timeline - Estonia in 2011, Latvia in 2014, and Lithuania in 2015 - the shared goal was stability.

Asked about the claim by Bulgaria’s EU Commissioner Ekaterina Zaharieva that wages in the Baltics rose by 70-100% after adopting the euro, Ijabs didn’t dismiss it. He confirmed the euro had been a factor in economic growth, but pointed out that other elements played a role too - like foreign investment and wage pressures from labor shortages. At the same time, he warned that demographic decline across Europe remains a challenge. In both Latvia and Bulgaria, research, innovation, and productivity need to improve to avoid population loss and economic stagnation.

Ijabs concluded with a message for Bulgaria: adopting the euro brings stability and opportunities for economic growth. For smaller, open economies like Bulgaria’s, being part of the eurozone enhances competitiveness and integration into the EU’s single market. The goal, he said, should be convergence - catching up with Western Europe. The euro, in his view, is one of the strongest tools to help achieve that.

Source: Club Z