Bulgaria will switch to the euro in a few days, its government has just been brought down in the streets, and citizens are facing a painful truth about the club of the common currency
Bulgaria is introducing the euro as its government collapses and unrest spreads through the streets. Will the new currency bring stability—or simply a higher cost of living for the poorest?
Bulgaria will enter the eurozone on January 1, 2026—a moment that Brussels likes to describe as the country’s “final anchoring” in the core of Europe, and that Sofia presents as the historic completion of a path begun with EU accession in 2007. But there is another fact: yesterday, December 11, 2025, the government of Prime Minister Rosen Zhelyazkov fell, pressured by mass protests that had been swelling across the country for weeks.
Formally, the transition from the lev to the euro has long been “prepared ground”—the Bulgarian currency has lived for decades under a hard peg to the euro through a currency board, and the EU had already given the green light for the change from the start of 2026. But what looks like a technical process on paper is, in reality, turning into a social stress test. A country entering the euro as the poorest member of the Union, with chronically low trust in institutions, is doing so at the very moment when its executive power has collapsed “in front of the cameras.”
The spark that ignited the protests was the draft 2026 budget—higher contributions and taxes (including a tax on dividends), coupled with the impression that money was being redirected toward the apparatus of force and the “untouchables,” while ordinary people were being asked for another round of belt-tightening. Bulgarians, to their credit, had no intention of quietly waiting to be crushed by a new plan. Yet even when the government, fearing the street, withdrew the budget, the anger did not subside—the slogans shifted from fiscal items to corruption, clientelism, and a “mafia-style” model of governance. One of the symbols of public rage became Delyan Peevski*—a controversial political power broker under U.S. and UK sanctions.
* Delyan Peevski is one of the most influential and controversial political-business figures in contemporary Bulgaria, often described as the embodiment of the fusion of politics, big capital, and media control. A long-serving MP and a key figure in the Movement for Rights and Freedoms (DPS)—a party that formally represents the Turkish minority but has in practice become a symbol of opaque influence over state institutions—Peevski has for years been linked to networks of clientelism, influence over the judiciary and security services, and control of part of the media landscape. As a result, he was placed under U.S. Magnitsky Act sanctions in 2021, and later under UK sanctions, over allegations of systemic corruption. Although he rarely participates formally in executive power, his ability to support or bring down governments from the shadows has made him a symbol of the so-called “deep state.” Protesters therefore recognized him not merely as an individual, but as the personification of a model of governance that survives changes of governments and elections.
For this reason, Bulgaria’s entry into the eurozone is not merely a story about exchange rates and coins, but about who actually holds the steering wheel of the state at the moment when the “unit of measurement” of everyday life is changing. Experience from the periphery points to an uncomfortable pattern: elites networked with the state apparatus, banks, large retail chains, and EU funds usually face such transitions more prepared and more flexible than workers, pensioners, and small entrepreneurs. Bulgaria is entering the euro at a moment when society has already said it has had enough. The only question is whether “European normality” will arrive in the form of stability—or in the form of a new, normalized inequality. Given our own experience and everything we have seen so far, this may be a rhetorical question.
The Budget as a Match, Corruption as Fuel: Why the Protests Brought Down the Government
The government did not fall because a single issue escalated—although the trigger was the budget—but because a long-accumulating combination of material anxiety and political contempt finally erupted. The draft 2026 budget was the moment when the abstract talk of “reforms” turned into a very concrete question: who pays, and who benefits. The proposed higher levies—taxes and contributions—were perceived as a blow to already thin household budgets, especially in a country where the average wage (around €880) is far below the EU average and trust in the state, institutions, and the judiciary is chronically low.
What was particularly incendiary was the conclusion many citizens drew—that under the guise of “stabilization,” the very apparatus that has frustrated them for years was being filled. This includes the police, security services, and judiciary—three pillars that in public perception do not stand as protectors of society, but as protectors of the system. In a country regularly cited within the EU as problematic on corruption, any signal that “more is being spent on control systems and less on people” inevitably sounds like provocation. Even when the draft budget was withdrawn, the impression remained that the withdrawal was merely tactical (which it almost certainly was), rather than an admission of error.
This reveals a second layer of the protests. It is not just about budget lines, but about the feeling that politics is a closed circuit in which power circulates among the same networks, the same intermediaries, and the same informal centers of influence. It is no coincidence that words like “mafia” and “oligarchy” appeared most frequently in protest messages, nor that protesters personalized the problem in figures long perceived by the public as symbols of the “untouchables.” In such an atmosphere, any fiscal measure—even one that might be interpreted elsewhere as technical alignment—becomes a moral insult.
At this point, entry into the eurozone ceases to be a neutral topic. Some protesters are also protesting against the euro, not necessarily because they dream of “monetary sovereignty” as a grand idea, but because they expect a banal yet brutal consequence—that their lives will become significantly more expensive. In a society already grappling with the feeling that prices are “European” while wages are “Balkan,” the currency change itself is experienced as an additional risk—especially if the state is politically paralyzed and no one has the authority to enforce market oversight. When this fear combines with the belief that decisions are being made over people’s heads, protest becomes a logical form of “pressure from below.”
A Political Vacuum Before the Euro: Who Governs When Prices Need Governing
Bulgaria has been stuck in a cycle of political instability for years. Elections are repeated, coalitions are patched together, and parliament remains fragmented. In such a system, Bulgarian governments often function as temporary arrangements—stable enough to survive a few months, too unstable to carry out deep reforms. Now, with the government falling in December, this “temporary” character of politics is reaching a moment of absolute delicacy.
So what happens now? What is the procedure? The president gives the mandate to the largest party to try to form a new majority; if that fails, the mandate moves on; and in the end—if no one can assemble a majority—a technical (caretaker) government and new elections follow. This will not be easy. Nine parties in parliament mean that any majority depends on complex deals, blackmail, and tactical “external support.” In such an atmosphere, politics looks more like a survival market than the governance of a state.
For the euro transition, this is a nightmare. In theory, a caretaker government can handle the “administrative” part of the transition—logistics, information, coordination with banks. In practice, the most sensitive part is not logistics at all, but social peace. Caretaker governments, by definition, have limited legitimacy and are cautious about moves that would make enemies among major market players.
There is also another dimension, well known to all of us—when people do not trust politicians, even a “good measure” looks like a trick. Bulgaria already has experience with deep political apathy. Low voter turnout signals a profound withdrawal of citizens from formal politics. Protests are, paradoxically, also a sign of the opposite—when the institutional channel empties, the street becomes the only channel. That is why a realistic scenario is one in which the euro is introduced “technically,” but experienced socially as an imposed project without a safety net. And when that happens, a few weeks of bad news from shops and cafés are enough for discontent to spill over into a new round of political crisis, even larger protests, and further escalation.
January 1, 2026: A Change of Currency or a Change in Power Relations
The Bulgarian euro story contains an irony that is often glossed over: the lev has lived on a leash for decades. The currency board regime and fixed exchange rate to the euro mean that monetary policy has long been severely constrained. In that sense, entry into the eurozone is not a dramatic break like it would be for a country with a “floating” currency—it resembles more a formalization of an already existing state. But formalization is no small thing, because it changes the rules of the game, the institutional framework, and—most importantly—the distribution of risk.
For the state and capital, the euro promises lower transaction costs, easier access to financing, and a “stamp of belonging” to a club still marketed as a space of security. Banks and large businesses like predictability: no currency risk, no conversion costs, easier dealings with eurozone partners. Entry into the eurozone is also symbolically presented as an exit from the “peripheral waiting room.”
But what about ordinary citizens? Fear of price increases is not an irrational phobia, but an expectation grounded in experience. When a currency changes, so does price psychology. For a while, people struggle to orient themselves in new numbers—and that period is ideal for “rounding,” shifting, and hidden price hikes. Hyperinflation does not have to occur for a shock to be felt; it is enough for the most visible items to become more expensive—coffee, bread, public transport, small household goods, and services. Clearly, where wages are low, a “small” increase becomes large, because it consumes a bigger share of income.
This brings us to the question of power relations. The eurozone is by no means just a currency; it is an institutional regime with rules that have class consequences. In good times, the euro can feel like an anchor of stability. In bad times, the same regime can act as an instrument of discipline—without the option of devaluation—shifting adjustment inward, onto wages, labor rights, and public spending. In peripheral economies, where the production structure is weak and dependent on external centers of capital, this often means that “competitiveness” is bought with cheap labor, and development is reduced to attracting investments seeking low costs and quick profitability.
Bulgaria, therefore, is not entering the eurozone as an equal member of the “core,” but as a country already feeling what it means to be peripheral. Emigration, weak bargaining power of labor, high sensitivity to price shocks, and deep distrust toward the political class that will manage the transition. The euro can bring some real benefits, but only if the state has both the capacity and the will to protect the majority (which, in Bulgaria’s case, is very difficult). Without that condition, the euro becomes yet another mechanism for “normalizing” the existing order—more comfortable for those who already hold the levers, harder for those living paycheck to paycheck.
Prices, “Rounding,” and the Psychology of Shock: The Croatian Experience as a Warning
When a state changes its currency, it does not change only the banknotes, but also the way citizens “read” everyday life. The euro, as a rule, does not create inflation out of nothing, but it acts as a magnifying glass. Everything that was previously hidden in small price increases, shrinking packaging, or services that were “quietly” getting more expensive is suddenly attributed to one clear event. In other words, it is a “paradise” for retailers, who will exploit this en masse.
Croatia is the closest and most memorable example in the region. After the introduction of the euro at the beginning of 2023, a wave of consumer anger followed—people claimed that the prices of certain foods and services jumped overnight, often through simple “relabeling” of figures, as if some retailers had copied kuna prices into euros, always conveniently rounding up. The state responded with inspections and fines, and some companies lowered prices again under public pressure. There were even attempts to boycott shopping centers, but all of that quickly fell apart once it became clear that there was no will behind the idea for much deeper change.
Bulgaria could now fare even worse than Croatia. In a country where wages and pensions are even lower, every “small” rounding-up carries more weight. The most dangerous scenario is not a dramatic explosion of prices (because citizens would see that and rebel), but thousands of small increases that add up over time, while no one “registers” them in time. Dual price display helps, but it does not solve the problem. Some citizens still struggle with conversion, and the market always finds ways to be formally “by the rules” while actually pushing margins higher. The very fact that Bulgaria is entering the euro without a stable government suggests that retailers will go wild with prices.
The Poorest EU Member in the Eurozone: Wages, Poverty, Emigration, and a “Peripheral” Economy
Bulgaria is entering the eurozone as the poorest country in the European Union—and this is not a label, but arithmetic felt in the refrigerator and on the electricity bill. The average monthly wage is around €880, the minimum about €551. Within such limits, even relatively “mild” price increases in basic goods can have a serious effect, because households spend a larger share of their income on food, energy, and housing. It is no coincidence that Bulgaria has the highest share of people at risk of poverty or social exclusion in the EU, at around one third of the population.
The economic picture also has a deceptive side. Unemployment is low, around 3–4%, and growth in some years has been solid. But being “employed” does not mean being “secure.” Bulgaria has a high share of in-work poverty—people who remain poor despite having jobs. This is a typical peripheral configuration: the labor market “functions,” but the value of labor remains low. In such a system, people often do not “beat” inflation with wages, but survive through additional jobs, family support, or emigration. The inflationary wave of 2022–2023 hit households particularly hard, because food and energy are precisely the items that cannot be “skipped.” And even when inflation later falls to lower levels, prices rarely “go back”—they simply stop rising as fast (a pattern seen all over Europe).
The structure of the economy further explains why Bulgaria has long been perceived as a periphery. A large part of its business model relies on cheap labor and lower costs, which attracts a certain type of investment—assembly, subcontracting plants, textiles, and services that can be outsourced. This can sustain employment, but it rarely creates a strong domestic high–value-added industry. At the same time, profits often flow out of the country, while the local state remains in the role of managing a “favorable environment”: low wages, weak bargaining power of labor, and flexibility that in practice often amounts to insecurity.
Demographics may be the most brutal indicator of this condition. Bulgaria has lost millions of people over a few decades. Today it has about 6.4 million inhabitants, while in the late 1980s it was close to 9 million. Emigration is not just a “brain drain,” but a constant mechanism through which the periphery is emptied and the center is filled. This creates a paradox. On the one hand, labor shortages push wages upward; on the other, the departure of the most productive reduces society’s capacity to modernize and build its own development sectors. In such an environment, the euro can, at least theoretically, bring stability and certain financial benefits, but it can hardly be a shortcut to convergence. If the problem is deeply structural, a currency does not solve it—it can at best “lock it in” within a more stable framework.
Who Gains, Who Pays: EU Interests, Funds, and Bulgaria’s Real Future in the Eurozone
The eurozone is not a neutral club, but a political-economic architecture that always ties someone more tightly to the center. From Brussels’ perspective, the Bulgarian euro has both symbolic and strategic value: it confirms the “attractiveness” of the common currency, expands institutional control, and more firmly anchors a Balkan and Black Sea country within the European bloc at a time of heightened geopolitical tensions. Bulgaria sits on an EU frontier that is not merely administrative—it is a space of contact with Turkey, the Black Sea, NATO logic, and constant competition for influence. In this sense, the euro is also a political marker of loyalty.
But the question that concerns the ordinary person in Sofia, Plovdiv, or the interior is not geostrategy, but distribution. Who ultimately benefits from the transition? The greatest gains usually go to those already close to the “levers”: the banking sector, larger exporters and importers, big retailers, and construction and consultancy circles that live off public tenders and European funds. The euro reduces friction, increases the “orderliness” of the financial system, facilitates cross-border capital flows, and reduces risks for those already doing business with EU markets. That is a real benefit—but one distributed very unevenly.
In peripheral members like Bulgaria, the problem is not only that “the center takes,” but that domestic elites often become intermediaries in that taking. When a state has high levels of corruption and weak institutions, funds and integration become mechanisms of selective enrichment. Development happens where networks are strongest, not where social need is greatest. In such a model, the euro is merely “nice packaging”—a stable currency, tidy reports, better ratings—while in the background the same pattern continues: privatization of profits and socialization of costs. In the end, citizens get the feeling that “Europe has arrived,” but that it has arrived in the pockets of the same people who were the reason they lived poorly before.
The Baltic states are often cited as a bright example. They introduced the euro and managed to stabilize fiscally, attract investment, and grow. But that example is too often sold as a universal recipe. The Baltics had a specific set of circumstances: strong political consensus, a different institutional pace of reforms, a pronounced security motivation, and a social willingness to endure painful measures. And what is mentioned far less often—the Baltics also paid a price in emigration, demographic loss, and pressure on labor. “Success” is frequently measured by GDP and credit ratings, and less by the fact that entire generations left because they saw no future at home.
That is why it is realistic to look at Bulgaria without illusions. The euro can ease financial stability, reduce certain costs, and strengthen institutional frameworks. But if the distribution of power does not change—if the state remains trapped between oligarchic networks, a weak judiciary, and a low–value-added economy—the euro will reinforce peripheral status rather than break it. In such a scenario, the winners will be the elite that knows how to navigate funds, banks, and major flows, while the majority will receive a new currency and old problems: large (and growing) bills, low wages, insecurity, and the feeling that “Europe” is a project for others.
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