Lilyana Pavlova: The Euro Is Not a Cure-All, but a Strategic Opportunity for Bulgaria

The euro is not a solution to all economic challenges but a powerful instrument for growth and stability, said Lilyana Pavlova, former Minister of Regional Development from GERB and Vice President of the European Investment Bank from 2019 to 2023. Speaking on BNT, she stressed that the single European currency should be seen as a strategic opportunity for Bulgaria rather than a quick fix for its economic problems.

“The euro is a great opportunity. It represents a strategic choice about the direction we want our country to take. It offers a chance for Bulgaria’s economy to expand, to attract investment, to raise incomes, and to improve living standards,” Pavlova said. However, she underlined that the extent to which Bulgaria benefits depends entirely on how the country uses the opportunities that come with membership in the eurozone.

Pavlova referred to the consistent positions of European Central Bank President Christine Lagarde and International Monetary Fund Managing Director Kristalina Georgieva, who both insist that reforms must continue. “Maintaining fiscal discipline, careful budget planning, and responsible public spending remain crucial. We must not ease up,” Pavlova emphasized.

She admitted that the information campaign for Bulgaria’s euro adoption started slowly, with public debates initially dominated by political rhetoric and fearmongering. Over time, she said, the campaign gained momentum and contributed to calming public concerns. “People are beginning to understand that nothing disastrous will happen,” Pavlova noted, highlighting that the transition will not endanger savings or incomes.

According to her, inflation and rising prices cannot be attributed solely to the introduction of the euro. “Prices have gone up with or without the euro. We’ve seen periods of excessive price increases before. The key issue is state oversight,” she said. Pavlova cited Croatia’s example, where authorities actively monitored the transition, imposed fines for violations, and launched a public platform for comparing prices. She stressed that control is necessary but must be balanced - honest traders should not be unfairly pressured, while those abusing the system should face consequences.

Pavlova also pointed out that public trust in institutions remains low and must be rebuilt gradually. She reminded that Bulgaria’s entry into the ERM II mechanism, the eurozone’s waiting room, was achieved through years of effort and strict fiscal policy. In her view, political instability has slowed progress, but joining the eurozone remains the right strategic path for Bulgaria.

Discussing the 2026 budget and the need for financial responsibility, Pavlova emphasized that every budget should adhere to clear principles of revenue and expenditure management. “It’s acceptable to take loans when needed, but they must be taken with full awareness of how much is borrowed and how repayment will occur. Discipline is essential,” she said.

With Bulgaria’s deficit planned at around 3 percent, Pavlova warned that the country stands “on the edge between stability and risk,” urging the government to ensure that fiscal risks remain under control. She concluded by saying that Bulgaria now has six months to reach political agreement and push forward the reform of the Anti-Corruption Commission. “Reforms should not focus on individuals but on principles and policies,” she added.