Bulgaria passes law to adopt the euro

On 7 August 2024, the National Assembly in Sofia passed the law for the introduction of euro into the Republic of Bulgaria. The law was then promulgated in the State Gazette, and Bulgaria’s full adoption of the euro will likely take place in 2026.

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On 7 August 2024, the National Assembly in Sofia passed the law for the introduction of euro into the Republic of Bulgaria. The law was then promulgated in the State Gazette, and Bulgaria’s full adoption of the euro will likely take place on 1 July 2025.

The main points of a similar draft bill are outlined in the following article:

Bulgarian finance ministry publishes draft Introduction of Euro into the Republic of Bulgaria Act (cms-lawnow.com)

The law, a key part of the legal base for the introduction of the euro in Bulgaria, gives businesses and citizens information on how the changeover to the European currency will take place. The law’s adoption had been identified as a priority after the government’s decision to accelerate Bulgaria’s entry into the euro zone.

The law outlines the exchange and supply of banknotes and coins, the period of dual circulation of the Bulgarian lev (BGN) and the euro (EUR), the basic principles and rules, the general rules for currency conversion, regulation and compulsory administrative measures.

The following are the main points found in the law:

·       On the date of the introduction of the euro in Bulgaria, all accounts – current, deposit, savings and other accounts in local banks – will be converted into euro at the official exchange rate in a single, automatic and free of charge conversion.

·       The BNB will exchange euro banknotes and coins free of charge, in unlimited quantities and without time limits, at the official exchange rate from the day of the introduction of the European currency.

·       There will be a “dual pricing period” during which prices and other monetary amounts to be paid, credited and debited will be displayed and presented to citizens in both BGN and EUR.

·       There will be a transitional period for citizens, in which both currencies will be considered legal tender for the purpose of allowing an efficient exchange of banknotes and coins from BGN to EUR.

The euro will be introduced to Bulgaria once the price stability criterion is met, which is expected to happen in September or October, after which an extraordinary convergence report could be prepared with the target for adoption being 1 July 2025. Due to ongoing political uncertainty in the country and inflationary pressure on the national level, this date remains a target, but it is far from certain that adoption will take place at that time.

More clarity on the matter is expected in late 2024 when it will be known whether inflation levels are in line with the Maastricht criteria. As of now, however, adoption of the euro is not expected to be delayed until 2026.

For more information on this draft act and how Bulgaria’s planned adoption of the euro could affect your business, contact your CMS client partner or these CMS experts: Nevena Radlova and Konstantin Stoyanov.