Bulgaria's Deputy PM: Euro Adoption May Bring Temporary Price Fluctuations, But Long-Term Gains Are Clear

Bulgaria’s entry into the eurozone is expected to bring clear economic advantages, but it also carries risks that go beyond the often-discussed topics in public discourse. This was underlined by Deputy Prime Minister and Chair of the Economic Analysis Council, Tomislav Donchev, during a panel discussion titled “Bulgaria in the Eurozone: Prices, Investments, and Fiscal Policy.” The event was part of the third annual Council conference hosted at Sofia University “St. Kliment Ohridski.”

Joining Donchev in the conversation were Assoc. Prof. Atanas Georgiev, Dean of the Faculty of Economics, Council Secretary Plamen Nenov, senior economist from the World Bank's office Desislava Nikolova, Fiscal Council member Lyubomir Datsov, and Atanas BTA.

Donchev pointed to short-term "price vibrations" in the early months after the euro’s introduction as a likely outcome. He described them as normal and anticipated, driven more by psychological reactions than real economic triggers. In his words, such fluctuations would be short-lived in a functioning market environment backed by proper regulatory oversight. If institutions respond swiftly and appropriately, Donchev believes these adjustments will stabilize quickly.

He emphasized that similar trends were observed in other countries upon adopting the euro, and in most cases, the extent and duration of price changes were limited. “The greater challenge will be public reaction rather than the economic process itself,” he said, expressing confidence that by March 2026, concerns among the population would begin to subside.

Beyond pricing effects, Donchev drew attention to a less visible risk: the potential for increased public debt. With improved access to financing after euro adoption, he warned of a scenario where successive weak or wasteful governments could undermine fiscal stability if proper budgetary discipline isn’t maintained. Reaffirming his stance, Donchev insisted that regardless of external pressures, the national budget should remain balanced and avoid deficits.

Despite these warnings, he remained firm in his belief that the net effect of euro area membership will be positive. Benefits include greater access to credit for businesses, increased investor confidence, and stronger alignment with EU economies. Donchev also highlighted long-term gains from infrastructure development - specifically the completion of key transport corridors 4 and 9 - as well as the need for improved vocational education as part of the broader economic convergence effort.

Addressing the broader implications, Donchev stated that Bulgaria’s transition to the euro will serve as an example of how public anxiety can be countered through transparency and informed dialogue. He reaffirmed the government’s commitment to providing clear and fact-based communication to citizens throughout the process.

He concluded by emphasizing that the most effective defense against price speculation and public uncertainty lies in open public engagement, adherence to market principles, and a responsible fiscal framework.