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Yahoo
a day ago
- Business
- Yahoo
Bulgaria on Track to Adopt the Euro, Supporting the Economic Outlook
Bulgaria's potential adoption of the common currency would support potential growth of around 2.75% a year and accelerate convergence towards average European Union living standards. Bulgaria formally requested that the European Commission (EC) and the European Central Bank (ECB) assess the country's readiness for joining Economic and Monetary Union on 25 February. This was a crucial step that placed the decision about accession in Europe's hands, prudently distancing the decision from persistent domestic political divisions on the subject. Scope Ratings (Scope) expects the ECOFIN Council to approve Bulgaria's accession by 8 July after publication of the special convergence report. Recent feedback from European institutions has favoured Bulgaria's entry. If successful, this would expand the euro area to 21 member states, following Croatia (2023), Lithuania (2015) and Latvia (2014). Bulgaria's efforts at controlling inflation have proven crucial in advancing its bid to join the single currency. Price stability has proven the most challenging of the core euro-convergence criteria in recent years. The harmonised annual inflation rate moderated to 2.8% in April from 4.0% in March. The 12-month-on-12-month rate – the convergence criterion – remained at 2.7% in April, broadly in line with the benchmark of the average of the three euro-area member states with the lowest rates of inflation (France, Cyprus and Luxembourg in April) plus a 1.5pp tolerance margin – totalling 2.8% (Figure 1). Importantly, Bulgaria currently meets the inflation criterion even without the exclusion of outlier countries in the EC's and ECB's calculations – a factor that played a role in Croatia's approval for entry in 2022. Bulgaria has typically had comparatively modest inflation, a trend that may reassert itself. Scope forecasts that consumer-price inflation will average an elevated 3.4% this year before falling to 1.6% next year. Figure 1: Bulgaria meets the final euro convergence criterion as inflation falls Harmonised inflation, annual change, % A primary risk to Bulgaria's accession remains domestic political fragmentation. Sharp divisions between those favouring deeper integration within the EU and those preferring rapprochement with Russia have been reflected in the seven general elections held since 2021. This split has compromised government reforms required for the adoption of the euro, resulting in years-long delays to the process. Divisions about the pace of accession persist within the governing coalition, while pro-Russian opposition group Vazrazhdane (Revival) has called for a referendum on euro adoption to seize on public unease about higher inflation if Bulgaria joins the euro and the fiscal challenges facing some euro area countries. Pro-Russian President Rumen Radev has backed the idea of a referendum, but the right to call one rests with parliament, where the majority of pro-euro parties have rejected the proposal. Radev has referred the matter to the Constitutional Court, but this is unlikely to disrupt the euro-accession timetable. Another concern for accession has been the government's fiscal position. The country has a record of moderate budget deficits and comparatively low public debt. But recent increases in state spending on salaries, pensions, defence and measures to ease the cost-of-living crisis have challenged this record. Nevertheless, the general government deficit was unchanged at 3.0% of GDP last year from the previous year due to strong revenue growth (Figure 2). The authorities have committed to a budget deficit of 3.0% of GDP this year. General government debt will rise steadily, reaching 34% of GDP by 2030 from 24% at end-2024, though remaining among the lowest in the EU. The EC favourably assessed Bulgaria's medium-term fiscal-structural plan for 2025-2028 early last month, which is a positive step for euro adoption, suggesting public finances remain stable and sustainable. Figure 2: Fiscal metrics remain sound, even though deficits are wider and debt is increasing % of GDP For a look at all of today's economic events, check out our economic calendar. Dennis Shen is the Chair of the Macro Economic Council and Lead Global Economist of Scope Group. The rating agency's Macroeconomic Council brings together the company's credit opinions from multiple issuer classes: sovereign and public sector, financial institutions, corporates, structured finance and project finance. Brian Marly, senior analyst of sovereign ratings at Scope and lead sovereign analyst for Bulgaria, contributed to writing this commentary. This article was originally posted on FX Empire Profits, Big Money Inflows Send SEI Shares Higher Bulgaria on Track to Adopt the Euro, Supporting the Economic Outlook Should You Invest in the US Stock Market Now? Portugal: Persistent Political Fragmentation to Test Growth and Fiscal Prospects Uber Picking Up Big Money Inflows Product Performance, Big Money Lift Exelixis Sign in to access your portfolio
Arab Times
3 days ago
- Business
- Arab Times
Bulgarian nationalists protest government plans to adopt euro currency
SOFIA, Bulgaria, June 1, (AP): Thousands of flag-waving Bulgarians took to the streets of the capital, Sofia, and other major cities on Saturday to protest government plans to adopt the euro and to demand a referendum on the new currency. The protesters, led by civic groups and nationalist parties, sang patriotic songs and shouted slogans like "Freedom for the Bulgarian lev' and "The future belongs to sovereign states.' The anti-euro rally came four days before the Balkan country is expected to receive green light from Brussels to enter the eurozone. The demonstrators in Sofia carried flags of the pro-Russian Vazrazhdane party and a huge banner that read "The battle for the Bulgarian lev is the last battle for Bulgaria.' An increased police presence kept the protest peaceful. Bulgaria joined the European Union in 2007 and remains of its poorest members, plagued by years of instability that has fueled euroscepticism among its 6.4 million citizens. Disinformation campaigns from home and abroad have added fears of economic changes that could bring more poverty. President Rumen Radev encouraged the anti-euro voices by proposing earlier this month a referendum on the currency, citing public concerns over inflation and purchasing power. The proposal was turned down by the pro-European majority in parliament, which accused Radev of acting in favor of Moscow with his last-minute attempt to sabotage the euro adoption, aimed at deepening European integration amid growing geopolitical tensions.
Time of India
3 days ago
- Business
- Time of India
Bulgarian nationalists march against euro currency adoption
Thousands Bulgarians took on the streets of the capital, Sofia, and other major cities on Saturday to protest government plans to adopt the euro and to demand a referendum on the issue (Image credit: AP) Thousands gathered in Bulgaria's capital Sofia and other major cities on Saturday to reject the country's plans to adopt the euro, the latest move by the eastern European country to strengthen its status in the European Union . Critics of the move are demanding that the government hold a referendum over whether the country should abandon the lev and adopt the euro as its currency. It comes months after Bulgaria, along with Romania, were admitted to the Schengen area. Demonstrators in Sofia carried flags of the pro-Russian Vazrazhdane party. A large banner read "The battle for the Bulgarian lev is the last battle for Bulgaria." Civic groups and nationalist parties organized the protest, leading the march singing patriotic songs and shouting slogans like "The future belongs to sovereign states." Bulgaria, which joined the European Union in 2007 and remains its poorest member, is expected to get approval from Brussels in June to adopt the euro. Disinformation campaigns stoke fear: Fears that the euro will harm Bulgaria's economy, coupled with a mistrust of institutions after years of instability, has led many to oppose the upcoming changes. Several recent surveys showed nearly half of those questioned said they were opposed to Bulgaria joining the eurozone. Some people, particularly those in small towns and rural areas, are reluctant to adopt the single currency, with some of them having never traveled abroad and not used to international transactions. Disinformation campaigns from home and abroad have sought to stoke fears that the economic changes will bring more poverty. Bulgarian president rejects euro: Among those who are against the adoption of the euro as currency is Bulgarian President Rumen Radev. He had proposed the referendum on the currency earlier this month, citing public concerns over inflation and purchasing power. Radev also said the government had not implemented needed measures to allow the "most vulnerable" to withstand the shock of euro adoption. The pro-European majority in Bulgaria's parliament rejected the referendum proposal, accusing Radev of acting on behalf of Russia.
Yomiuri Shimbun
3 days ago
- Business
- Yomiuri Shimbun
Bulgarian Nationalists Protest Government Plans to Adopt the Euro Currency
The Associated Press A protester hold Russian flag as thousands Bulgarians took on the streets of the capital, Sofia, and other major cities on Saturday to protest government plans to adopt the euro and to demand a referendum on the issue. Sofia, Saturday, May 31, 2025. SOFIA, Bulgaria (AP) — Thousands of flag-waving Bulgarians took to the streets of the capital, Sofia, and other major cities on Saturday to protest government plans to adopt the euro and to demand a referendum on the new currency. The protesters, led by civic groups and nationalist parties, sang patriotic songs and shouted slogans like 'Freedom for the Bulgarian lev' and 'The future belongs to sovereign states.' The anti-euro rally came four days before the Balkan country is expected to receive green light from Brussels to enter the eurozone. The demonstrators in Sofia carried flags of the pro-Russian Vazrazhdane party and a huge banner that read 'The battle for the Bulgarian lev is the last battle for Bulgaria.' An increased police presence kept the protest peaceful. Bulgaria joined the European Union in 2007 and remains of its poorest members, plagued by years of instability that has fueled euroscepticism among its 6.4 million citizens. Disinformation campaigns from home and abroad have added fears of economic changes that could bring more poverty. President Rumen Radev encouraged the anti-euro voices by proposing earlier this month a referendum on the currency, citing public concerns over inflation and purchasing power. The proposal was turned down by the pro-European majority in parliament, which accused Radev of acting in favor of Moscow with his last-minute attempt to sabotage the euro adoption, aimed at deepening European integration amid growing geopolitical tensions.
Leader Live
3 days ago
- Politics
- Leader Live
Bulgarian nationalists protest over government plans to adopt euro currency
The protesters, led by civic groups and nationalist parties, sang patriotic songs and shouted slogans like 'Freedom for the Bulgarian lev' and 'The future belongs to sovereign states'. The anti-euro rally came four days before the Balkan country is expected to receive the green light from Brussels to enter the eurozone. Demonstrators in Sofia carried flags of the pro-Russian Vazrazhdane party and a huge banner that read 'The battle for the Bulgarian lev is the last battle for Bulgaria'. An increased police presence kept the protest peaceful. Bulgaria joined the European Union in 2007 and remains one of its poorest members, plagued by years of instability which has fuelled Euroscepticism among its 6.4 million citizens. Disinformation campaigns from home and abroad have added fears of economic changes that could bring more poverty. President Rumen Radev encouraged the anti-euro voices by proposing earlier this month a referendum on the currency, citing public concerns over inflation and purchasing power. The proposal was turned down by the pro-European majority in parliament, which accused him of acting in favour of Moscow with his last-minute attempt to sabotage the euro adoption, which is aimed at deepening European integration amid growing geopolitical tensions.
