Bulgarian businesses welcome Euro despite small cash snags

Until the end of January, payments in Bulgaria can be made in both Lev and Euro

Two weeks into the Eurozone, Bulgarian businesses are optimistic that despite issues related to shortage of small cash, the introduction of the new currency will boost financial stability, improve cross-border transaction costs and increase investor confidence.

Until the end of January, payments in Bulgaria can be made in both Lev and Euro. Local banks will be exchanging these currencies free of charge until June 30.

As much as 48 percent of all Lev in circulation were already withdrawn, the Bulgarian National Bank (BNB), said in a statement over the weekend. There were 16.1 billion Lev (8.3 billion Euro) and 3.1 billion Euro in circulation.

Bulgaria’s banking sector ensured a seamless transition to the Euro, the Association of Banks in Bulgaria (ABB) said.

“The smooth transition is the result of many years of coordinated and consistent preparation by the banking sector and all key participants in the process,” says ABB.

In confirmation of ABB’s statement, representatives of Aurubis Bulgaria, part of German copper producer Aurubis AG, told SeeNews that their so far trouble-free transition to the Euro has been tied to the operational organisation of the Bulgarian banks.

According to media reports, however, the Euro switch is not without glitches. Companies, especially businesses in small towns, have been experiencing a shortage of Euro coins and 10 Euro banknotes. The problem is most acute with retailers, as they are obliged to provide the change in Euro even when payment has been made in Lev. To avoid such issues, customers have been opting for card payments.

Despite increased pressure on their cashiers, retailers remain positive.

“Membership in the Eurozone is of crucial importance for the Bulgarian economy, and we expect it to have a direct positive effect not only on our operations but also on the entire supply chain. Beyond the expected improved economic stability and reduced administrative burden, we, as an international company operating throughout the Eurozone, believe that the elimination of the currency risk between the Lev and the Euro will facilitate our cross-border trade and long-term investment planning,” said supermarket chain Lidl Bulgaria, a unit of Germany’s Schwarz Group.

The adoption of the Euro will significantly increase foreign investor confidence, stimulate the development of more value-added industries, lead to better pay, improve purchasing power, and create more opportunities, according to the supermarket chain.

The first to feel the positive effect of the Eurozone membership was the local bourse. Turnover on the Bulgarian Stock Exchange nearly tripled in the first week after Euro adoption as the blue-chip SOFIX soared by over 14 percent, the sharpest growth among the Southeast European stock markets, according to bourse data.

“Bulgaria’s accession to the Eurozone, of course, brings expectations that it will have a positive impact on our economy, the well-being of the entire society and the development of the capital market. The Eurozone can be an important catalyst for restoring confidence and for the more active participation of foreign investors in the market,” Asen Yagodin, chairman of the stock exchange’s board of directors, said last week.

Commercial real estate in Bulgaria too is expected to benefit from the Euro adoption. The country’s sovereign risk profile is likely to improve to reflect lower transaction costs, improved investment flows, reduced borrowing costs, strengthened trade and tourism, and enhanced financial stability and integration.

“Lower sovereign and banking sector risk, Euro denominated financing and improved liquidity conditions should compress yields over time, help narrow the risk premium versus CEE (Central and Eastern European) peers already in the Eurozone, and broaden the investor base for office, logistics and retail assets,” property consultancy Colliers Bulgaria commented.

Bulgaria stepped into the new year with a new currency but without a state budget. The country’s coalition government resigned in December, following mass protests against widespread corruption and the 2026 draft budget, which was later withdrawn. As a result, the country entered 2026 with an extension of the 2025 budget.

“The drama with the budget will not derail the Euro adoption process. The bigger question is whether the country can find a sustainable solution to its political deadlock and reverse the budget trajectory so that Bulgaria’s model of low taxes and low public debt can be sustained,” Petar Ganev, a researcher at the Institute for Market Economics (IME), said in December.

Ganev concerns are shared by Berlin-based Scope Ratings.

“It is crucial that Bulgaria sustains budgetary discipline even after Euro adoption and after the associated fiscal convergence conditionality ahead of adopting the Euro is relieved,” Scope Ratings said.

The country’s accession to the Eurozone may help begin a much-needed process of healing after a long period of political instability, heightened divisions around the country’s Euro goals and economic uncertainty, according to the ratings agency.

Scope Ratings also said it expects that the Eurozone entry would help reduce inflation gradually as integration with the Euro bloc cuts transaction costs, despite some Bulgarians’ concerns that the adoption of the Euro would worsen inflation.