In Bulgaria, the price increase is a fact. But the "euro" factor has minimal influence, says economic expert Evgeniy Kanev. "Even this influence could have been minimized."
Why is it so expensive? Just because of the speculation around the euro? Or are there deeper reasons? With the important caveat that "expensive" also has a dimension of personal feeling and comparison.
Evgeniy Kanev: The feeling is not only subjective - there really is a price increase. The topic of how much the real price increase is and whether this is mainly because of the euro is another matter. This is where the disinformation begins. Before we talk about the effect of introducing the euro, I will start with three facts from Eurostat. Annual inflation in Bulgaria as of June this year is about three times lower than inflation for 2022, when there was no euro; for the same period it is nearly two times lower than inflation in Romania, which is not in the eurozone, and, note, inflation for the first half of 2026 with the euro is only about one percentage point higher than the second half of 2025 without the euro. All this clearly demonstrates that in practice the "euro" factor in itself has some minimal influence. But even this influence could have been further minimized if it were not for the series of actions of the government of Rosen Zhelyazkov and the regulators before the introduction - the intimidation of traders that there would be price controls in time, which made them raise them preemptively; or the significant increase in the prices of electricity, water, heating, product, health, administrative and other fees, which have nothing to do with the introduction of the euro. The introduction itself certainly also has an effect: the huge gray sector laundered the illegitimate levs into euros through the purchase and sale of real estate and other liquid assets, which rather increased inflation in 2025. In other words - there is a cumulative increase in prices, but it is due to a large extent to the structural problems of the economy such as weak competition, insufficient domestic production (especially of food) and to a lesser extent to the laundering of illegitimate income. Let's not forget the completely objective factor - the US war with Iran, which permanently increased fuel prices and so on along the chain - again without any connection with the euro.
Croatia seemed to "warn" us in 2023: everything will be the same, but in euros, i.e. almost twice as expensive.
Evgeniy Kanev: This joke about the double appreciation has long been popular in Bulgaria - it was even a key argument of the opponents of the euro. I have heard it about Italy, Greece and other countries that introduced the euro - most recently about Croatia. One fundamental difference should be noted between Bulgaria and these countries. While they had their own currencies with a floating exchange rate against the euro before its introduction, Bulgaria had a fixed exchange rate - due to the currency board for over 28 years. For this reason, comparisons with Bulgaria are only appropriate for the Baltic countries, which also had a (quasi)fixed exchange rate before entering the eurozone. And in all of them - which entered in three different years - inflation in the year before and upon entry was almost the same. As for Croatia, it, like Bulgaria and all of Eastern Europe, suffered the most from the energy crisis in 2022 due to the start of the war in Ukraine. That is why inflation there actually reached its peak of 13% in November 2022 - shortly before it entered the eurozone. And the following year, when it was already part of the eurozone, it fell to 5.4%. But since all this is a real increase in prices, the easiest explanation for the feeling of appreciation is that the euro is to blame. This is what happened in Bulgaria.
Okay, but the monstrous speculation in our country is visible to the naked eye and at all levels. Should the state fight it? In my opinion, there is a terrible and massive cognitive trap: over time, people seem to lose their instinct to calculate, and since the euro is apparently half the value of the leva, they are imperceptibly influenced by this, and the furious speculators profit. A simple example: a doner is now worth 20 leva.
Evgeniy Kanev: There is certainly a lot of psychology in the market. Even Keynes introduced the term "psychological determinants" in his theory. But before we talk about the role of the state, a few words about the market itself. The free market is free because it allows people on the supply side to price their goods or services in such a way as to maximize their income. Note - this does not mean offering the highest possible price, because then they will lose their customers. In other words, in the new conditions of the euro - if the economy is truly a market - producers and traders should have the freedom to find the optimal price from which they profit the most. And often this is done by guessing, which looks like speculation. The alternative is a supply deficit. In fact, speculation occurs where deficits are artificially created. Such are the cases when various players are deliberately prevented from selling on a certain market or, if they are already on it, at what minimum price they can sell. In short - these are many sectors of the domestic market where competition is deliberately limited by a political umbrella or by force. This is the speculation that the state must fight by actually encouraging, not restricting, competition. And this is the problem with the role of the state - as my friend jokes, we have a commission to protect not TO, but FROM competition. This is how oligarchy and poverty itself reproduce themselves - because the market works only within the framework set by it.
What are the actual benefits of introducing the euro - beyond the macroeconomic ones? How do we explain to the average consumer that even a banichka is now about 5 euros? And in a cultural sense - are we really a nation of fraudsters who, from the doner to the big things in the state, took advantage of the currency conversion?
Evgeniy Kanev: A banichka can reach 5 euros if the state does not create conditions for the normal functioning of the market. Because the market itself is a kind of institution - rules of transactions according to the parameters set by the state. And since there are no real control bodies and the prosecutor's office, it often works not "against" but "for" crime - we have this effect. It's as if we are in the era of robber barons from the end of the 19th century in the USA.
The benefits of the euro are long-term and are most difficult to explain to "ordinary people". Entry into the eurozone is actually entry into a club with rules that are common to everyone and are supposedly applied more effectively than the BNB managed our currency. Therefore, it is believed that bank bankruptcies like those in 1996-1997 and Corpbank will not be possible. These rules reduce the overall business risk and attract foreign investments, reduce interest rates, fees and currency risk, increase trade turnover and thus increase income and everyone wins. Our economy is completely intertwined with the economies of the eurozone - the second largest monetary zone in the world, and thus the transfer of capital and know-how - an unconditional prerequisite for becoming a developed country - becomes much easier.
We profess the same right-wing economic doctrine, at the center of which is that small and medium-sized businesses should move us forward, and in our country we talk about "state capitalism". Is there a way out of this?
Evgeny Kanev: Instead of "breaking" the oligarchy and "building" democratic capitalism as in Europe, in our country during the transition the practices of the Russian political-economic model prevailed - the fusion of political and economic power, which some call "state capitalism". In practice, there are no truly rich people in our country who do not have an "umbilical cord" with the state. With its enormous financial, institutional and media resources, this oligarchy has seduced a sufficiently large number of poor, dissatisfied or unsuccessful Bulgarians in terms of property, intellectually and morally, to serve it as political subjects, media servitude or simply an electorate. Hence we have this stifling vice of the tacit "union" between the richest and the poorest, which stifles the development of the middle class. And without a strong middle class, there is not only no democratic capitalism for small and medium-sized businesses. There is also no democracy. That is, there is no chance of becoming a developed country – a home for all Bulgarians.
I also thought of Reagan, who said that you cannot empower the weak by weakening the strong. And also: you cannot help the wage earner, i.e. in our country – the working poor, as a state you target the one who provides it to him. And something from me: the state and no one can do for you what you should be able to do for yourself. How would you comment on these phrases?
Evgeniy Kanev: I would say that it depends a lot on the historical and geographical context of "strong" and "weak". When you say it from the perspective of a free society that has developed over two centuries generally within a single legal framework, these concepts are full-blooded, a product of some kind of social justice, whose law is "he who does not work, shall not eat". In other words, the strong are the rich thanks to their intelligence, hard work and entrepreneurship. In our country, however, we often associate "the strong" not exactly with these qualities, but with the old communist and State Security nomenclature, which converted political into economic power, and with its product - organized crime.
That is why I am quite skeptical about the smooth transfer of the political axes "right" and "left" - from a developed democracy to our oligarchic turf. If I have to express myself more philosophically: "right" and "left" are concepts after the choice of the "oligarchy-democracy" metalevel. In fact, Reagan himself, whom you brought into our conversation, says the same thing, which is my favorite: "There is no such thing as left or right. There is only up or down - up, man's eternal dream of individual freedom, compatible with order, or down to the anthill of totalitarianism".
Well, I think that in our country, only the EU is keeping us from the step towards totalitarianism – The totalitarian candidates simply don't have the resources.
What do you think about Rumen Radev's government?
Evgeniy Kanev: Visibly tormented in the company of EU leaders and seemingly mentally connected to Russia, he is the prime minister of a poor, but still European country and must comply. So he enters and exits from role to role - something like a billboard with constantly changing messages. Because in order to rule for a long time, he also needs that 1/3 of the electorate that doesn't understand geopolitics, but has believed him that even if he is somehow connected to Russia, he will fight the oligarchy without taking us out of the EU. That's where this image comes from, performing all sorts of political loopholes - something for every audience, and in fact a hotbed for scandals and a conveyor belt of journalistic stories. That is why his government often does not know what the current message of the day is, and when we add the improvisations of the parliamentary group, the cacophony is complete.
What is the way forward for the democratic community and its representation? Is there a leadership problem?
Evgeniy Kanev: In practice, there is no unified democratic community in our country, outside of the described fundamental choice "oligarchy-democracy". As we see, along this axis, these 300 to 400 thousand voters who now vote for the DB and PP, and previously for the Reformist Bloc and the Blue Coalition, often exclude even GERB as "democrats", and the attitude towards them is the number 1 factor for internal division. But after this axis, in this community there are both liberals and conservatives (despite the imposed label for everyone as "liberals"); there are economic rightists, centrists and even leftists; climatically more and less green, etc. In short, this community would not exist if Bulgaria were a full-fledged democracy. For this reason, its cohesion is mostly along the lines of the rule of law and judicial reform - whose acute deficits are the cardinal difference between real and facade democracy or autocracy.
Therefore, the problem of unifying this community is not one of leadership, but of ideology. There is simply no common idea of how reforms should take place, and so any difference quickly escalates to accusations of the leaders of betraying the "cause" and thus to the impossibility of creating a significant political entity. Of course, behind this failure lies the mentality, culture, if you will, the folk psychology of a traumatized society, the vast mass of which would be content with just bread, brandy and a salad on the table. And the freedom to curse "the others".
Therefore, I don't know what the way forward is. Perhaps evolution within Europe, if we are lucky, will point it out.
And finally: why is it not fully understood in our country that Ukraine not only does not surrender, but also has rewritten everything since Sun Tzu with the drone war? Lack of military information or hybrid Russian propaganda, according to which Russia is invincible?
Evgeny Kanev: Of course, the reason is the intensive and large-scale Russian propaganda. In our country, it finds extremely fertile ground, because it steps on a nationwide washed and constantly washed consciousness of the Liberator, of the invincible army that crushed fascism, even of the second liberation. That is why even now the myths of Nazism in Ukraine, of the ancestral Russian lands, of aggressive NATO and the war-mongers from the EU are taking root so easily.
Against this background, many believe that from Ukraine, which was part of Russia, there are no Ukrainians, but fascists, that the atrocities of the Russian army are fake news of the West, and the Russian army is invincible. I strongly emphasize that our political elite also has a huge merit, which not only did not lift a finger to stop this propaganda in our country, but even installed its spokesmen in the public media and took advantage of it in every way to reduce public support for Europe - and its rules in our country.