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Yahoo
2 days ago
- Business
- Yahoo
Bulgarians Are Getting the Euro, But Half of Them Don't Want It
(Bloomberg) -- Doroteya Kanavrova crosses her arms and shakes her head. 'I'm against it,' she says, before going back to arranging her tomatoes, cucumbers and zucchini at her roadside stall. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban NY Long Island Rail Service Resumes After Grand Central Fire Do World's Fairs Still Matter? Bulgaria is ready to join the euro, the European Union said last week, something hailed by the government as another step toward deeper integration. But in the agricultural northeast, the 56-year-old small farmer represents the growing swathe of Bulgarians concerned about the cost. The country has a long history of hardship and its per-capita economic output is still two-thirds of the EU average after almost two decades of membership. Yet for millions of Bulgarians who lived through bank failures, economic crises and the painful transition of the 1990s, their currency — the lev — is more than just bills and coins, it's a symbol of stability. A currency board introduced in 1997 tightly pegged the lev to the deutsche mark and then to the euro. That helped Bulgaria put an end to the kind of reactive monetary policy seen in other post-communist countries like neighboring Romania and consign hyperinflation that saw prices rise three times a day to history. Polling from Eurobarometer showed that Bulgarians are split down the middle over the euro, membership of which is now scheduled for early 2026. Moreover, they're twice as skeptical as the EU average, according to the survey published in May, with far-right politicians organizing protests against membership. 'For 28 years, people got used to the currency board and are now worried what will happen without it,' said Svetoslav Gavriyski, the finance minister who prepared the country for the currency board in 1997. He dismissed the inflation fears as 'stupid rumors.' 'A country has to exit the currency board sooner or later to become a normal country.' Bulgaria would only be the second country to adopt the euro since Greece flirted with leaving the single currency a decade ago. Croatia joined in 2023, following other former communist nations like Slovakia and the Baltic states. The biggest economies in the region — Poland, Romania, the Czech Republic and Hungary — have all put the euro on the back burner. At a Bloomberg event in Prague this week, Czech central bank Governor Ales Michl extolled the virtue of having a national currency to help fight inflation. In Bulgaria, the prospect of switching currencies is raising fears, particularly among low-income earners and pensioners with hard currency savings. While politicians point to benefits like increased investment and lower borrowing costs over time, many citizens worry that prices will climb in the short term. A recent spike in inflation helped delay euro adoption by a couple of years. One of the EU's most energy-intensive economies, Bulgaria was hit hard by Russia's war in Ukraine. Prices rose at the fastest pace since the 1990s. Kanavrova worries the switch to the euro, for example, will boost the price of fertilizer and make production from her one-hectare farm more costly. 'Big businesses are richer, they can afford it,' she said. 'We're doing bad with the lev; we'll be worse off with the euro.' As most of her customers are Romanian tourists on their way to Bulgarian seaside resorts, she prefers to take Romanian leu over euros when she needs to accept foreign currency. She can use the money on cross-border shopping trips in winter. That's not to say Bulgarians aren't pro-European. More than half of them say they trust the EU, twice the proportion of those who trust their own government. A recent government motion in support of the euro was backed by more than two thirds of Bulgarian parliamentarians. The problem for officials is that they're struggling to find a common language with those who, unlike big businesses, don't see the direct benefits of trading in a common currency. It's easier for populist parties: Protests backed by the far-right, pro-Russian Revival party gathered thousands of people across the country for a second weekend. The leaders of Revival, which has become the third-biggest party in the Bulgarian Parliament, vow to take the country out of NATO and renegotiate its EU membership. They say euro adoption is a further loss of sovereignty, though during a visit to the US last month its leaders suggested the lev should be pegged to the dollar. Protesters gathered again on Thursday, including lawmakers from Revival, to briefly block key boulevards in central Sofia in front of the headquarters of the governing Gerb party. People then moved to the headquarters of one of the big TV channels to protest its coverage of the demonstrations, the public Bulgarian National Television reported. President Rumen Radev, the most popular political figure in the country, meanwhile has questioned whether Bulgaria is ready. His call for a referendum on the date of accession was dismissed by parliament last month. He called the EU's decision last week to give the nod to Bulgaria's membership 'joy for those in power and an alarm for the people' worried about price increases. 'Policymakers ought to have done a better job at informing the public on the benefits of the common currency, even if entering monetary union is a technical subject,' Dennis Shen, lead global economist at Scope Ratings, said by email. 'Bulgarians are not the first people in a country preparing to adopt the euro who have proved skeptical about the benefits of the single currency,' he said. 'But support for the euro tends to rise after adoption as people's worst fears turn out to be unfounded.' The government has vowed in recent weeks to fight speculative price hikes and regulators promised to step up scrutiny on retailers. While signing a number of agreements with business lobbies, labor unions, banks and insurers, Prime Minister Rosen Zhelyazkov said on Monday the aim is to prevent any attempts to 'unjustifiably increase' prices. For Mihail Georgiev, 40, an entrepreneur whose businesses vary from importing sparkling wines to AI solutions, getting the euro will be another milestone in Bulgaria's development. The country joined the EU in 2007 and has remained its poorest member. On Jan. 1 this year it entered the Schengen customs-free area that covers most of the EU, along with Romania. Georgiev said switching to the common European currency is good for Bulgaria's image and boosts tourism. 'It's the second-biggest reserve currency, it's the currency of hundreds of millions of people,' said Georgiev. 'In the past, I've waited for visas for hours, every border crossing was painful because of the numerous controls. Now I really dream of a single world with a single currency.' --With assistance from Irina Vilcu and Andra Timu. (Updates with fresh protests in 15th paragraph. An earlier version of this story corrected the spelling of Shen in 17th.) New Grads Join Worst Entry-Level Job Market in Years American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again ©2025 Bloomberg L.P.
Yahoo
2 days ago
- Business
- Yahoo
Bulgarians Are Getting the Euro, But Half of Them Don't Want It
(Bloomberg) -- Doroteya Kanavrova crosses her arms and shakes her head. 'I'm against it,' she says, before going back to arranging her tomatoes, cucumbers and zucchini at her roadside stall. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban NY Long Island Rail Service Resumes After Grand Central Fire Do World's Fairs Still Matter? Bulgaria is ready to join the euro, the European Union said last week, something hailed by the government as another step toward deeper integration. But in the agricultural northeast, the 56-year-old small farmer represents the growing swathe of Bulgarians concerned about the cost. The country has a long history of hardship and its per-capita economic output is still two-thirds of the EU average after almost two decades of membership. Yet for millions of Bulgarians who lived through bank failures, economic crises and the painful transition of the 1990s, their currency — the lev — is more than just bills and coins, it's a symbol of stability. A currency board introduced in 1997 tightly pegged the lev to the deutsche mark and then to the euro. That helped Bulgaria put an end to the kind of reactive monetary policy seen in other post-communist countries like neighboring Romania and consign hyperinflation that saw prices rise three times a day to history. Polling from Eurobarometer showed that Bulgarians are split down the middle over the euro, membership of which is now scheduled for early 2026. Moreover, they're twice as skeptical as the EU average, according to the survey published in May, with far-right politicians organizing protests against membership. 'For 28 years, people got used to the currency board and are now worried what will happen without it,' said Svetoslav Gavriyski, the finance minister who prepared the country for the currency board in 1997. He dismissed the inflation fears as 'stupid rumors.' 'A country has to exit the currency board sooner or later to become a normal country.' Bulgaria would only be the second country to adopt the euro since Greece flirted with leaving the single currency a decade ago. Croatia joined in 2023, following other former communist nations like Slovakia and the Baltic states. The biggest economies in the region — Poland, Romania, the Czech Republic and Hungary — have all put the euro on the back burner. At a Bloomberg event in Prague this week, Czech central bank Governor Ales Michl extolled the virtue of having a national currency to help fight inflation. In Bulgaria, the prospect of switching currencies is raising fears, particularly among low-income earners and pensioners with hard currency savings. While politicians point to benefits like increased investment and lower borrowing costs over time, many citizens worry that prices will climb in the short term. A recent spike in inflation helped delay euro adoption by a couple of years. One of the EU's most energy-intensive economies, Bulgaria was hit hard by Russia's war in Ukraine. Prices rose at the fastest pace since the 1990s. Kanavrova worries the switch to the euro, for example, will boost the price of fertilizer and make production from her one-hectare farm more costly. 'Big businesses are richer, they can afford it,' she said. 'We're doing bad with the lev; we'll be worse off with the euro.' As most of her customers are Romanian tourists on their way to Bulgarian seaside resorts, she prefers to take Romanian leu over euros when she needs to accept foreign currency. She can use the money on cross-border shopping trips in winter. That's not to say Bulgarians aren't pro-European. More than half of them say they trust the EU, twice the proportion of those who trust their own government. A recent government motion in support of the euro was backed by more than two thirds of Bulgarian parliamentarians. The problem for officials is that they're struggling to find a common language with those who, unlike big businesses, don't see the direct benefits of trading in a common currency. It's easier for populist parties: Protests backed by the far-right, pro-Russian Revival party gathered thousands of people across the country for a second weekend. The leaders of Revival, which has become the third-biggest party in the Bulgarian Parliament, vow to take the country out of NATO and renegotiate its EU membership. They say euro adoption is a further loss of sovereignty, though during a visit to the US last month its leaders suggested the lev should be pegged to the dollar. President Rumen Radev, the most popular political figure in the country, meanwhile has questioned whether Bulgaria is ready. His call for a referendum on the date of accession was dismissed by parliament last month. He called the EU's decision last week to give the nod to Bulgaria's membership 'joy for those in power and an alarm for the people' worried about price increases. 'Policymakers ought to have done a better job at informing the public on the benefits of the common currency, even if entering monetary union is a technical subject,' Dennis Schen, lead global economist at Scope Ratings, said by email. 'Bulgarians are not the first people in a country preparing to adopt the euro who have proved skeptical about the benefits of the single currency,' he said. 'But support for the euro tends to rise after adoption as people's worst fears turn out to be unfounded.' The government has vowed in recent weeks to fight speculative price hikes and regulators promised to step up scrutiny on retailers. While signing a number of agreements with business lobbies, labor unions, banks and insurers, Prime Minister Rosen Zhelyazkov said on Monday the aim is to prevent any attempts to 'unjustifiably increase' prices. For Mihail Georgiev, 40, an entrepreneur whose businesses vary from importing sparkling wines to AI solutions, getting the euro will be another milestone in Bulgaria's development. The country joined the EU in 2007 and has remained its poorest member. On Jan. 1 this year it entered the Schengen customs-free area that covers most of the EU, along with Romania. Georgiev said switching to the common European currency is good for Bulgaria's image and boosts tourism. 'It's the second-biggest reserve currency, it's the currency of hundreds of millions of people,' said Georgiev. 'In the past, I've waited for visas for hours, every border crossing was painful because of the numerous controls. Now I really dream of a single world with a single currency.' Explainer: How Bulgaria Is Closing In on Joining the Euro Area --With assistance from Irina Vilcu and Andra Timu. New Grads Join Worst Entry-Level Job Market in Years American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again ©2025 Bloomberg L.P.
Bloomberg
2 days ago
- Business
- Bloomberg
Bulgarians Are Getting the Euro, But Half of Them Don't Want It
Doroteya Kanavrova crosses her arms and shakes her head. 'I'm against it,' she says, before going back to arranging her tomatoes, cucumbers and zucchini at her roadside stall. Bulgaria is ready to join the euro, the European Union said last week, something hailed by the government as another step toward deeper integration. But in the agricultural northeast, the 56-year-old small farmer represents the growing swathe of Bulgarians concerned about the cost.
