Could Bulgaria Face a 'Greek Scenario' After Adopting the Euro?

With Bulgaria set to adopt the euro on January 1, 2026, questions are surfacing about whether the country might face financial risks similar to those that led to Greece’s debt crisis. While comparisons are understandable, the differences in economic fundamentals and fiscal behavior between the two countries suggest that a repeat of the Greek scenario is unlikely - though not impossible if certain conditions are ignored.

What Happened in Greece

Greece's crisis was the result of long-standing fiscal mismanagement. For years, successive governments used the credibility gained by eurozone membership to borrow at low interest rates, using the funds to sustain extensive public spending. Rather than using the borrowed money for investment or reform, it largely funded generous social programs.

When the global financial crisis hit in 2008, Greece was left exposed. Economic activity contracted, especially in key sectors like tourism, and public debt ballooned. To make matters worse, Greece was caught manipulating its fiscal data, undermining trust with investors and EU partners.

Without the ability to devalue its currency - due to eurozone membership - and unable to access financial markets, Greece was forced to request a massive bailout from the EU, the European Central Bank (ECB), and the International Monetary Fund (IMF). This rescue package, amounting to €240 billion, came with harsh austerity measures that plunged the country into years of recession. By 2015, Greek debt had climbed to €315 billion, or 175% of GDP.

Why Bulgaria Is Not Greece

Bulgaria’s fiscal policy over the past two decades has been consistently conservative. The country operates under a currency board pegging the lev to the euro, which has enforced financial discipline. Public debt currently stands below 30% of GDP - well beneath the eurozone threshold of 60%.

The upcoming euro adoption will remove the currency board but replace it with access to eurozone financial mechanisms and lower-cost borrowing on international markets. However, this does not mean Bulgaria is set to repeat Greece’s mistakes.

The key difference lies in Bulgaria’s low debt levels, stable macroeconomic indicators, and the lessons learned from the Greek crisis. Moreover, eurozone oversight has strengthened significantly since 2010. Mechanisms for early warning and fiscal monitoring now make it more difficult for countries to hide debt or misrepresent data.

What Could Still Go Wrong

While the fundamentals are currently sound, risks remain. Political instability in Bulgaria, evident in frequent elections and shifting coalitions, could lead to poor fiscal decisions in the future. If government spending increases sharply or if borrowing is used irresponsibly, debt levels could rise quickly.

Another challenge could come from implementation delays or missteps during the transition to the euro - especially regarding communication with small businesses and regulatory updates, such as aligning fiscal software and labeling prices in both currencies.

There are also broader concerns about corruption and the shadow economy. These structural problems do not automatically lead to a crisis but can erode institutional trust and economic efficiency, making the country more vulnerable during global downturns.

Conclusion

The so-called "Greek scenario" is theoretically possible in any country that loses fiscal discipline. However, Bulgaria is starting from a far stronger position than Greece did in the early 2000s. The country has maintained low debt, follows eurozone entry criteria closely, and benefits from stronger EU-level oversight than existed in Greece's time.

Ultimately, whether Bulgaria maintains its stability will depend on domestic policy choices. The euro cannot guarantee fiscal responsibility - it can only create a framework. It will be up to Bulgarian policymakers to operate within it wisely. The risk of crisis is not built into the euro itself, but into how governments choose to use the tools available to them.