Latest news with #Balkan
Fast Company
a day ago
- Business
- Fast Company
Bulgaria to enter the euro zone: What that means and why everyone's not happy about it
Bulgaria is a step closer toward becoming the 21st country to adopt the euro and join the euro zone. On June 3, the European Commission announced that the Balkan nation now fulfills the four nominal convergence criteria requirements to adopt the single currency and enter the euro zone, and may transition as soon as January 1, 2026. 'The euro is a tangible symbol of European strength and unity,' European Commission president Ursula von der Leyen said in a statement. 'Bulgaria's economy will become stronger, with more trade with euro area partners, foreign direct investment, access to finance, quality jobs and real incomes. Bulgaria will take its rightful place in shaping the decisions at the heart of the euro area.' Bulgaria first joined the European Union in 2007, and like other members, agreed to eventually adopt the single currency. Out of the 27 member states, only 20 countries currently use the euro, which is the second most-used currency in the world with 341 million users. While the green light from the commission paves the path for the poorest EU member state to integrate into the euro zone and get rid of its national currency, the lev, its road to getting here hasn't been easy, and not all Bulgarians are happy about it. Here's what to know. What is the euro zone? All 27 European Union members, who had to formally apply and be accepted into the union, coordinate economic policy as a part of the European Monetary Union. However, not all EU members use the single currency, and only those who have replaced their national currencies for the euro are considered to be part of the 'euro zone.' While countries have slowly been admitted, the latest addition to the euro zone was Croatia in 2023. In addition to Bulgaria, the six other nations who are yet to transition to the euro zone include Denmark, Sweden, Poland, Hungary, Romania, and the Czech Republic. Upon being accepted into the European Union, members (except Denmark, due to an 'op-out' clause) are required to adopt the euro once they meet the convergence criteria. The criteria requires countries to fulfill requirements for price stability, sustainable public finances, sustainable interest rates, and stable exchange rates. Before formally adopting the single currency, the decision still needs approval from EU ministers, which are expected to green-light the transition per the commission's recommendation. Why now? Bulgaria had failed to meet convergence criteria in the past, as it requires countries to not have inflation higher than 1.5% above the top three euro zone performers. Now, with a new review by the European Commission and the European Central Bank, Bulgaria has met the requirements, setting itself up for a transition early next year. Not everyone is happy about joining While long awaited, the transition has met opposition from Bulgarian citizens and Bulgarian pro-Russian and anti-euro political leaders. A recent survey showed the country is split, with 50% of Bulgarians opposing the euro. The country, which has a population of 6.4 million, also saw several thousands of protesters earlier this year opposing the currency adoption, with thousands more demanding a referendum.
Telegraph
2 days ago
- Business
- Telegraph
Bulgaria shows even citizens of small nations reject the euro
Bulgaria is slated to be the newest member of the Eurozone. The European Commission and European Central Bank (ECB) released statements today that effectively confirmed Bulgaria's adoption of the euro on January 1 2026. Bulgaria's entry extends the currency bloc from 20 to 21 members and builds on the nation's 2007 decision to abandon the lev as its official currency; the year it joined the EU. Bulgaria's adoption of the euro reflects its ability to overcome problematic economic indicators. Bulgaria was initially expected to become a Eurozone member in 2024, but its 9.5 per cent inflation rate scuppered these aspirations. Bulgaria's harmonisation with ECB policies is expected to lower its inflation rate to 1.8 per cent by 2026 and ensure its alignment with the EU's price stability criteria. Bulgaria's debt-to-GDP ratio has declined since 1998 and stands at just 24.1 per cent. While Bulgaria's ability to transcend demographic decline and political dysfunction to meet the EU's criteria appears inspiring, there is a darker side to the story. Bulgaria's adoption of the euro overrules public opinion and underscores the sovereignty concerns that the EU's smaller member states have about the bloc's supranational authority. Despite projections of a 5.8 per cent increase in Bulgaria's exports after it joins the euro, opposition to the common currency is fierce. A recent Eurobarometer survey revealed that 50 per cent of Bulgarians reject the euro and only 43 per cent are in favour of it. Bulgarian pensioners fear that pricing goods in euros will erode their life savings and their younger counterparts share their concerns about a loss of independence. Incoming Polish president Karol Nawrocki's sovereignty-based opposition to swapping the zloty for the euro resonates strongly in Bulgaria. The disconnect between elite decision-making and public opinion on the euro has threatened political cohesion by galvanising pro-Russian populist movements. Varazhdane Party leader Kostadin Kostadinov, who recently signed a cooperation agreement with president Vladimir Putin's United Russia Party, has capitalised on anti-euro sentiments and rallied thousands of like-minded Bulgarians on the streets of Sofia. As Bulgaria has had seven parliamentary elections since 2021 and lacks the ability to form a durably stable government, this dispute has serious destabilising potential. The COVID-19 pandemic underscored the potential for anti-vaccination disinformation to spread widely in Bulgaria and the euro's adoption over the public's will could further erode trust. While EU officials celebrate Bulgaria's milestone acceptance of a common currency, the mood in Sofia is much more sombre and apprehensive. This is yet another reminder of the growing discontent between Brussels and the European street.
The Independent
2 days ago
- Business
- The Independent
The euro is about to get a new member. What does that mean?
The European Union has given the green light for Bulgaria to become the 21st member of the euro currency union. The decision on Wednesday allows the Balkan nation of 6.4 million people to replace its national currency, the lev, with the euro, effective January 1. The move is a key step in the EU's ongoing project to strengthen the connections between its member countries. Here are basic facts about the currency union - also called the eurozone - and how countries join it. What is the euro? The euro is a shared currency and monetary system launched in 1999 when 11 EU member countries irrevocably fixed their currencies to the euro as an accounting currency, then swapped out the national notes and coins in 2002. The EU established the European Central Bank to handle monetary policy and set interest rate benchmarks for member countries, similar to the role of the U.S. Federal Reserve. How do countries join the euro? Countries must meet four criteria: low inflation, keeping deficits and debt under control, low long-term interest rates and a stable exchange rate between their currency and the euro. Countries must go through a two-year 'waiting room' in which their currency does not fluctuate excessively against the euro. The process is meant to demonstrate that their economies are sustainably converging with that of the eurozone. Once the European Commission determines that requirements have been met, the member governments of the EU decide by what's called a qualified majority vote. Approval needs a minimum of 55 per cent of member states representing at least 65 per cent of the EU population. After joining, countries face rules limiting debt and deficits. Those rules are intended to keep countries from running large deficits that could undermine the euro. What is Bulgaria's situation? The European Commission ruled on Wednesday that Bulgaria has met the requirements, seconded by an opinion from the ECB. The matter now goes to a vote at a meeting of EU finance ministers slated for July 8. EU officials say the vote is a done deal. Bulgaria is unusual in that it pegged its currency, the lev, to the euro right from the beginning of monetary union in 1999, even before it joined the European Union in 2007. Bulgaria also has very low levels of debt, only 24.1 per cent of annual economic output. That is well below the 60 per cent level set in the economic criteria for eurozone membership. The last step was getting inflation below the benchmark of 2.8 per cent, or no more than 1.5 per cent higher than the average of the three lowest eurozone members. There were concerns about the level of corruption and money laundering in the EU's poorest country. The commission and the ECB found, however, that Bulgaria has made progress in those areas. What do people in Bulgaria think about the euro? The most recent Eurobarometer poll carried out by the EU showed that 50 per cent of Bulgarians were opposed and 43 per cent were in favour. Reasons include fears of inflation, distrust of official institutions in a country that has had seven governments in four years, and widespread misinformation on social media. The issue has been taken up by pro-Russian nationalist politicians who argue for keeping the national currency. President Rumen Radev stoked anti-euro forces with a proposal for a referendum, which was rejected by parliament. Misinformation included false claims that the euro would allow EU officials to confiscate dormant bank accounts or use a digital euro to control people. On January 1, only euros will be dispensed from cash machines, though both currencies will circulate in cash for a month. After that, lev notes can be exchanged at banks for 12 months and for an unlimited time at the Bulgarian National Bank. What are the advantages of euro membership? In theory, the euro means lower interest rates for business and consumers and eases cross-border trade within the eurozone. Companies no longer have to engage in currency exchange transactions or worry that exchange rate shifts will erode their profits or holdings. Travellers no longer have to pay commissions at an exchange booth or on their credit card bill when vacationing or on a business trip to another EU country. Member countries get a seat on the ECB's rate-setting council and so have a voice in eurozone-wide monetary policy. Are there disadvantages or risks? Countries that join lose some authority over their own economy. They give up their ability to set their own interest rates, and face restrictions on government spending and deficits, though those rules have proved flexible in practice. And they can no longer gain competitiveness relative to other countries by allowing their currency's exchange rate to devalue. Bitter memories remain of the debt and economic crisis that shook the eurozone in 2010 to 2015. After Greece admitted its deficit and debts were much larger than previously reported, it wound up defaulting on its debts, and market turmoil spread to other eurozone countries. Greece, Portugal, Ireland, Spain, and Cyprus were bailed out with loans by the other eurozone governments, in return for strict austerity measures that impacted many ordinary people, including government workers and retirees. Has the euro been strengthened since then? ECB President Mario Draghi is credited with defusing the eurozone crisis in 2012 by saying that the central bank would do 'whatever it takes' to save the euro. The ECB then said it could intervene in bond markets to support countries hit by turmoil, a safeguard that calmed markets even though it was never used. Later, other backstops were added, including a eurozone bailout fund and moving banking oversight from sometimes-lax national supervisors to the ECB. Why aren't all 27 members of the EU in the euro? Countries agree to join the euro as part of joining the EU, but not all have made the effort to meet the economic requirements. There is no time window to join. Denmark was granted an opt-out, while Sweden rejected the euro in a 2003 referendum despite not having an opt out and has no target date to join. Other non-members are Czechia, Hungary, Poland and Romania. Officials in Poland, the biggest non-member, have shown little interest in joining despite acknowledging the obligation to join someday. The winner of Sunday's presidential election, Karol Nawrocki, campaigned on keeping the zloty currency. The country's economy has grown strongly without euro membership, doubling in size over the past two decades as its standard of living has almost caught up with Western Europe since emerging from communist rule in 1989.
The Independent
2 days ago
- Business
- The Independent
The euro is about to get a new member, Bulgaria. What's the eurozone and how do countries join?
European Union officials gave the green light Wednesday for Bulgaria to become the 21st member of the euro currency union,, a key EU project aimed at deepening the ties between member countries. The Balkan country of 6.4 million people is to make the switch from its national currency, the lev, to the euro on Jan. 1. Here are basic facts about the currency union, also called the eurozone, and how countries join it. What is the euro? The euro is a shared currency and monetary system launched in 1999 when 11 EU member countries irrevocably fixed their currencies to the euro as an accounting currency, then swapped out the national notes and coins in 2002. The EU established the European Central Bank to handle monetary policy and set interest rate benchmarks for member countries, similar to the role of the U.S. Federal Reserve in the U.S. How do countries join the euro? Countries must meet four criteria: low inflation, keeping deficits and debt under control, low long-term interest rates and a stable exchange rate between their currency and the euro. Countries must go through a two-year 'waiting room' in which their currency does not fluctuate excessively against the euro. The process is meant to demonstrate that their economies are sustainably converging with that of the eurozone. Once the European Commission determines that requirements have been met, the member governments of the EU decide by what's called a qualified majority vote. Approval needs a minimum of 55% of member states representing at least 65% of the EU population. After joining, countries face rules limiting debt and deficits. Those rules are intended to keep countries from running large deficits that could undermine the euro. What is Bulgaria's situation? The European Commission ruled Wednesday that Bulgaria has met the requirements, seconded by an opinion from the ECB. The matter now goes to a vote at a meeting of EU finance ministers slated for July 8. EU officials say the vote is a done deal. Bulgaria is unusual in that it pegged its currency, the lev, to the euro right from the beginning of monetary union in 1999, even before it joined the European Union in 2007. Bulgaria also has very low levels of debt, only 24.1% of annual economic output. That is well below the 60% level set in the economic criteria for eurozone membership. The last step was getting inflation below the benchmark of 2.8%, or no more than 1.5% higher than the average of the three lowest eurozone members. There were concerns about the level of corruption and money laundering in the EU's poorest country. The commission and the ECB found however that Bulgaria has made progress in those areas. What do people in Bulgaria think about the euro? The most recent Eurobarometer poll carried out by the EU showed that 50% of Bulgarians were opposed and 43% in favor. Reasons include fears of inflation, distrust of official institutions in a country that has had seven governments in four years, and widespread misinformation on social media. The issue has been taken up by pro-Russian nationalist politicians who argue for keeping the national currency. President Rumen Radev stoked anti-euro forces with a proposal for a referendum, which was rejected by parliament. Misinformation included false claims that the euro would allow EU officials to confiscate dormant bank accounts or use a digital euro to control people. On Jan.1, only euros will be dispensed from cash machines, though both currencies will circulate in cash for a month. After that, lev notes can be exchanged at banks for 12 months and for an unlimited time at the Bulgarian national bank. What are the advantages of euro membership? In theory, the euro brings means lower interest rates for business and consumers and eases cross-border trade within the eurozone. Companies no longer have to engage in currency exchange transactions or worry that exchange rate shifts will erode their profits or holdings. Travelers no longer have to pay commissions at an exchange booth or on their credit card bill when vacationing or on a business trip to another EU country. Member countries get a seat on the ECB's rate-setting council and so have a voice in eurozone-wide monetary policy. Are there disadvantages or risks? Countries that join lose some authority over their own economy. They give up their ability set their own interest rates, and face restrictions on government spending and deficits, though those rules have proved flexible in practice. And they can no longer gain competitiveness relative to other countries by allowing their currency's exchange rate to devalue. Bitter memories remain of the debt and economic crisis that shook the eurozone in 2010-2015. After Greece admitted its deficit and debts were much larger than previously reported, it wound up defaulting on its debts and market turmoil spread to other eurozone countries. Greece, Portugal, Ireland, Spain, and Cyprus were bailed out with loans by the other eurozone governments, in return for strict austerity measures that impacted many ordinary people including government workers and retirees. Has the euro been strengthened since then? ECB President Mario Draghi is credited with defusing the eurozone crisis in 2012 by saying that the central bank would do 'whatever it takes' to save the euro. The ECB then said it could intervene in bond markets to support countries hit by turmoil, a safeguard that calmed markets even though it was never used. Later other backstops were added, including a eurozone bailout fund and moving banking oversight from sometimes-lax national supervisors to the ECB. Why aren't all 27 members of the EU in the euro? Countries agree to join the euro as part of joining the EU, but not all have made the effort to meet the economic requirements. There is no time window to join. Denmark was granted an opt out, while Sweden rejected the euro in a 2003 referendum despite not having an opt out and has no target date to join. Other non-members are Czechia, Hungary, Poland and Romania. Officials in Poland, the biggest non-member, have shown little interest in joining despite acknowledging the obligation to join someday. The winner of Sunday's presidential election, Karol Nawrocki, campaigned on keeping the zloty currency. The country's economy has grown strongly without euro membership, doubling in size over the past two decades as its standard of living has almost caught up with Western Europe since emerging from communist rule in 1989.
Asharq Al-Awsat
30-05-2025
- Business
- Asharq Al-Awsat
Booming Tourism Takes its Toll on Croatia's Coast
With its rugged coastline, pristine waters and more than a thousand inlets and islands, Croatia has seen a tourist boom in recent years. Last year alone, more than 20 million visited the Balkan nation, much of which stretches along the Adriatic Sea. But the environmental impact of tourism on the nearly 6,000-kilometre (3,720-mile) coastline and marine life is troubling experts -- and prompting calls for action. Sakarun beach on Dugi Otok island is often called "Croatia's Caribbean". Tourist boats drop anchor in the turquoise waters of the bay and head for its white sands. Some visitors complained, however, about unsightly swathes of Posidonia or dark Mediterranean seagrass on the shore, which led to its removal, AFP reported. The heavy machinery involved also removed sediment, resulting in the gradual disappearance of the sandy beach over the last decade. Croatia only has only a small number of sandy and pebble beaches, while the rest are rocky. "We don't have many sandy beaches so it's important that the sand we have is protected," said geologist Kristina Pikelj, from Zagreb University Faculty of Science. In 2021, she launched a project to monitor Sakarun, and to educate locals and tourists about the vital role played by the so-called "lungs of the sea". Posidonia -- a key store of carbon and producer of oxygen -- is critical to slowing the effects of climate change, as well as being vital for marine habitats and providing an erosion buffer for the beaches. For the past three years Posidonia, which was once used as a vineyard fertilizer, has been left on the beach, spread apart in piles. "We understand the tourist aspect, to show them the sand, this bay is beautiful and people really enjoy it," said Pikelj. Marija Meklav, one of three students participating in the fieldwork at Sakarun, added: "We are trying to raise public awareness and achieve something directly through field and laboratory work. "Our generation can achieve something in this regard," the 24-year-old said. With tourist numbers growing, local authorities have been expanding beach capacity for tourists in search of sun, sea and sand. At some locations so-called beach nourishment -- adding sediment to repair natural erosion -- has been carried out. But the technique has also been used to cover natural rocky parts with gravel or even concrete. During winter, the sea carries it away, meaning the costly process has to be repeated every season Dalibor Carevic, from Zagreb University Faculty of Civil Engineering said in places like Primosten, often called "the town of beaches" on the central coast north of Split, the practice has gone too far. Experts repeatedly warned against the removal of hundreds of meters of rocks along one of its central beaches. The rocks were ground and mixed with quarry stones to make an artificial pebble beach that opened in 2011, with the process repeated every year. In less than a decade the coastline at the Mala Raduca beach has shifted by some 20 meters towards the sea, satellite pictures show. Primosten's veteran mayor Stipe Petrina, though, said beach nourishment was essential for a town dependent entirely on tourism. "One cannot have a capacity for 15,000 people and beaches for 2,000," he told AFP comparing it with a ski resort that hosts thousands of skiers but only offers a few hundred meters of slopes. When tourism started to take off in the 1960s, locals ground rocks to make access to the sea easier. "Once there were vineyards here that could have remained but we would have all emigrated. The question is what is better," said Petrina. "In another Primosten bay there are rocks but I cannot see many tourists there," Petrina said. The town of 2,800 people hosted nearly 90,000 tourists last year, mostly between July and August. In early May, German tourist Karin Hoggermann watched trucks bringing new gravel to prepare the beach for the season. "For swimming and going in the sea, for kids, it's better that they repair the beach. Tourists would not come if they would not do that," she said. Unlike in Italy, Spain, the Netherlands or France, which also use beach nourishment, few rivers flow into the Adriatic Sea off Croatia, making its ecosystem more vulnerable as it is less accustomed to additional sediment input. Excessive construction even in protected marine areas, concreting, non-compliance with regulations and huge fleets of charter boats also take their toll. The number of car parks, marinas, ports and roads are also growing. One long-term solution is to raise awareness among locals and authorities as well as education, experts said, urging consultation for more sustainable solutions. "That conquest of the sea is not good and should be discouraged," said Carevic.
