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Bulgaria to join euro area on 1 January 2026

https://www.ecb.europa.eu//press/pr/date/2025/html/ecb.pr250708~b9676a9fa8.en.html
79•toomuchtodo•2h ago

Comments

jmyeet•1h ago
This will likely come with a one-time significant increase in inflation, at least based on other European countries.

When Germany converted to the Euro, the conversion rate was (IIRC) about ~2 DM to the Euro but from what I recall, a lot of everyday things went from costing 7 DM to 7 euro, effectively doubling in price. IIRC France was similar (ie ~6.5 francs to the Euro but 10 Francs went to 3 euro, etc).

I've tried searching for any studies on this to see if the effect was measured and, if so, whether it held with later countries joining the euro.

I'm a little surprised that the euro has been this stable for this long (going on 30 years). Finland debated leaving. IT's debated if there's even a legal mechanism to leave. We still have the problem that the ECB sets eurozone monetary policy with Germany and Greece being vastly different economies.

aopwiejfpoieajf•1h ago
Even though the Bulgarian lev has been pegged to the Euro for decades at this point?
dotancohen•52m ago
Just as the Mark and the Franc were.
bapak•49m ago
I don’t think those two are comparable economies to Bulgaria 20 years ago.
aopwiejfpoieajf•28m ago
Surely they were not pegged for decades given that the Euro was introduced in 1998 and they transitioned fully in 2002?
coliveira•57m ago
The Euro expansion is the mechanism the EU has to export inflation to other countries, similar to the way the US exports inflation with dollar trading across the world. When the easy expansion stops, this is when the debasement will start to occur. The US is already at this point, very soon the dollar will be less valuable as less trading is happening in USD.
mynameisbob•48m ago
I was in Belgium the week the Belgian franc converted to Euros. I saw no price changes other than rounding up or down to the nearest Euro equivalent price. If memory serves some stores showed prices in both denominations for a while which would not have allowed for stealth inflation to happen.

The currencies were pegged for a period before then so other than niche cases there really weren’t opportunities for massive price increases.

petesergeant•44m ago
> I've tried searching for any studies ... but from what I recall

I mean if you've tried to find evidence and can't, this feels a lot like you're simply misremembering?

joules77•19m ago
Covid sort of showed everyone how hard it is to survive as a small economy in the modern highly interdependent world.

One small disruptor to a core component of a small economy and they are standing outside the IMF to survive.

There are currently 50-60 small countries that depend on borrowing from the IMF (that too in dollars paying interest in dollars - given competition levels guess what dollar generating capacities small economies have? They end up economic vassals of larger systems or selling off national assets or being used in geopolitical games).

On the other hand look at China and India. They have more provinces/states than the EU and larger populations. Vastly differently economies spanning all those subunits. Yet you wont find any of those subunits complaining about their central bank setting monetary policy.

Why? Cuz look at the surroundings - Sri Lanka/Pakistan/Myanmar/Bangladesh/Thailand/Indonesia/even South Korea all at one point or another requiring the IMF to step in and bail them out when they ran into trouble.

The world is too complex and fast/ever changing and small economies are increasingly dependent on larger economies to manage the unknowns and unpredictability that lie ahead. Its almost become impossible to survive by themselves. Sort of like running a book store in the era of Amazon.

petesergeant•4m ago
> Yet you wont find any of those subunits complaining about their central bank setting monetary policy

I mean and also the US, but the key difference here is that those are also cohesive countries where wealth transfers between different areas is the norm. Much less problematic if a policy is better for New York than Alabama if you know for sure that the federal government is going to make sure Alabama doesn't get screwed.

In the EU you have the opposite problem: policies that benefit rich countries will result in the rich countries complaining about how they support the other economies and moralizing.

isodev•1h ago
Nice. It’s amazing to see the progress Bulgarians have made in the last 20 years after joining the EU. I can imagine it hasn’t been an easy process.
petesergeant•45m ago
Two things that surprised me when I spent a couple of months in Bulgaria:

* Bulgarian support for the EU is pretty low and people didn't think it made their life much better

* Bulgarian support for Russia is very high, like 50%, probably due to their historic help in kicking out the Turks

mc32•38m ago
Also the experience of Greece not too far back and the austerity imposed by Germany is not quite forgotten. Varoufakis cab attest to its severity.
isodev•30m ago
And yet, Greece recovered to become a leading economy in the region. The propaganda is strong on the airwaves these days, just like in the US, one shouldn’t react to “facts” taken out of context.

It seems (from here), support for Russia is somehow magically going down as Russia’s economy is having trouble paying for its “support” abroad.

jazzyjackson•24m ago
In which region is Greece a leading economy?
petesergeant•24m ago
> And yet, Greece recovered to become a leading economy in the region

I don't think that's true ... growth is good, but that's because there's a lot of catching up to do. If I remember correctly (and maybe I don't) then real GDP is still like -20% vs 2007, debt is EU-leading at like 150% of GDP, unemployment remains high, and wages remain low.

gbil•11m ago
This is a very distant view for the reasons behind the crisis in Greece and for sure the government of 2015 was not a victim. In the context of this thread, Bulgarians as Greeks before them, enjoy the money from the EU but don’t like the responsibility that comes from it, to reform, to also contribute and that you lose the own currency perks while you gain on other fronts. Of course there is a lot more here to discuss but this is my experience being a Greek in Greece.

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