Bulgaria's Euro Transition: Draft Law Unveiled for Public Discussion

The Ministry of Finance has released a draft law for public discussion concerning the adoption of the euro in Bulgaria. The primary aim of the proposal is to ensure a smooth and transparent transition to the European currency.

The deadline for receiving feedback on the draft law is April 24, 2024. The proposed legislation outlines the existing plan for replacing the Bulgarian lev with the euro. The decision to enshrine this plan in law, rather than a regulatory decree, aims to provide legal certainty to society and ensure the efficient functioning of the economy during the transition period.

One significant benefit highlighted in the draft law is the potential savings for businesses and households. Currently, the costs associated with currency conversion between the lev and the euro amount to approximately BGN 300 million annually. These costs have escalated to BGN 500 million per year due to inflation. However, once Bulgaria adopts the euro as its official currency, businesses and individuals will be able to conduct transactions in euros without incurring additional exchange fees. This shift is expected to alleviate the financial burden on businesses and households.

Furthermore, the transition to the euro is described as a one-time event, with limited costs associated with its introduction. It is anticipated that there will be no subsequent impact once the transition is complete.

Conversion and Rounding Rules

The draft law outlines the procedures for converting and rounding monetary amounts from Bulgarian lev (BGN) to the euro (EUR) as part of the transition process. It emphasizes the importance of accurate conversion and rounding to ensure the legitimacy and smooth implementation of the euro adoption.