Christine Lagarde: The Euro Will Bring Bulgaria Prosperity and Security

European Central Bank President Christine Lagarde said that Bulgaria’s accession to the eurozone would bring both prosperity and security to the country. Speaking in an exclusive interview with NOVA ahead of her visit to Sofia for the Bulgarian National Bank’s conference “On the Threshold of the Eurozone,” Lagarde addressed key issues surrounding the euro’s introduction, the experiences of other countries, and the broader future of Europe’s economy.

Reflecting on France’s own transition to the euro 23 years ago, Lagarde recalled that the public had two main fears: that the new system would malfunction and that prices would surge. “Everyone worried that prices would rise unfairly when the franc was replaced, and yes, some small sectors tried to take advantage,” she said. “But it was a one-time effect. If the government ensures that prices are displayed in both leva and euros from August and conversion rules are strictly followed, there is no reason for lasting inflation.”

Lagarde emphasized that Bulgaria is ready for euro adoption, even though there is not yet full public consensus. “I have seen many countries join the eurozone - in my roles at the IMF, as France’s finance minister, and now as ECB president,” she said. “At first, there are always doubts, but within a year, support grows once people see the benefits.”

Asked whether the French became poorer after switching to the euro, Lagarde firmly rejected that notion. “No, not at all. Some prices went up, like coffee or haircuts, but overall the country became stronger economically.”

Lagarde pointed to two main advantages Bulgaria would gain: prosperity and security. She explained that joining the euro would eliminate currency risk in trade and make exports to Europe more competitive. “Businesses will invoice and get paid in the same currency - no exchange rate, no hedging. Tourists, too, will have greater confidence traveling to Bulgaria knowing the euro is used.” On security, she added that joining the monetary union means being part of a stable framework with shared rules. “There are no random players. Everyone follows the same principles, and that creates discipline and trust, which credit rating agencies also recognize.”

On how to ensure a smooth transition and protect citizens, Lagarde stressed the importance of preparation and strict implementation. She said Bulgaria has made significant progress in recent years, particularly in updating legislation, strengthening anti-corruption measures, and adapting banking systems for euro transactions. “It’s essential that everything, from banknotes and coins to payment systems, is ready for use from day one. The conversion from leva to euros must be fair and transparent.”

Lagarde also commented on the ECB’s ongoing work on the digital euro, describing it as a natural step in adapting to modern financial habits. “Cash will never disappear - that’s our promise. But as people increasingly pay by card or phone, we need a digital form of central bank money,” she said. “It’s not a replacement for banknotes; it’s digital cash for the 21st century.”

Turning to climate change, Lagarde underscored that while the ECB’s main mandate remains price stability, it must account for the economic impact of environmental risks. “Floods, droughts, and other climate events affect crops, transport, and insurance costs,” she explained. “Central banks must include these risks in their forecasts and models because they influence inflation and financial stability.”

Finally, Lagarde spoke about Europe’s position in the global economy, stressing that the EU remains a powerful market with 450 million people - larger than the United States. “Europe has the talent and innovation capacity,” she said, “but it needs a stronger capital market and fewer barriers for entrepreneurs. If we achieve that, Europe can be a true global force.”

She concluded with optimism: “I believe in Europe’s strength. If we focus on innovation and productivity, we will not only compete - we will lead.”

Source: NOVA interview