Mr. Radev, how will the work of the Bulgarian National Bank change from January 1, 2026?
If a positive decision is made on July 8, from January 1, 2026, the Bulgarian National Bank will become a full member of the Eurosystem. The change will be both institutional and operational. This means that we will participate in the development, adoption and implementation of the single monetary policy of the eurozone – on an equal footing with the other national central banks and the European Central Bank. This is a significant institutional step forward.
At the same time, our main functions – maintaining financial stability, supervising the banking sector, ensuring the functioning of payment systems – are fully preserved and in some aspects will be further strengthened in the new framework.
There is much talk that by joining the eurozone, Bulgaria will lose part of its sovereignty. What will be the real voice of our country in determining the ECB's policy?
The public debate often ignores the essential fact that Bulgaria has not de facto conducted an independent monetary policy since the introduction of the currency board in 1997. The essential difference now is that by joining the eurozone we are moving from a regime of transmission of the European Central Bank's monetary policy decisions to a regime of direct participation in their formation. This means not just institutional integration, but the opportunity to influence - through participation in discussions, policy formation and exercising the right to vote.
As a member of the ECB's Governing Council, the Governor of the BNB will have an equal institutional status with the other governors of central banks in the eurozone. Despite the rotational voting mechanism, all governors participate in the discussions and contribute to the formation of the collective expertise and decisions of the Council.
In this context, it is not a question of a loss of sovereignty, but of a transition to a new, higher level of participation in the European monetary architecture. Bulgaria gains an institutional voice in a process whose results have so far had a direct impact on the national economy - but without its participation in the formulation and decision-making.
How will the role of the BNB in the management of foreign exchange reserves change?
The BNB will continue to bear the main institutional responsibility for the management of the country's international reserves, and this role will be further strengthened within the framework of the common rules and coordination mechanisms of the Eurosystem. This is part of the transition to shared monetary sovereignty, in which national competence fits into the supranational architecture.
From a technical point of view, this is one of the more complex aspects of the transition. Upon joining the euro area, the Bulgarian National Bank will contribute a capital contribution, which reflects its institutional participation in the capital of the ECB, and a reserve contribution, which represents a transfer of a relatively small part of the international reserves, according to the proportions established in the Treaty and Statute of the ECB. In return for this participation in the capital and reserves, the BNB will acquire a claim on the ECB, which will entitle it to a share of the income of the Eurosystem. This claim will be treated as an asset in the BNB portfolio and will be taken into account in the formation of the central bank's own capital and income.
The main part of the international reserves will remain under the direct management of the BNB, and this management will be carried out in accordance with the established principles of liquidity, security and profitability, and in accordance with the Eurosystem framework. In this sense, the BNB retains both the professional capacity and the responsibility for the management of our foreign exchange reserves.
When and where are the first Bulgarian euro banknotes expected to be printed?
The production of euro banknotes is centrally coordinated by the European Central Bank, which sets strict standards for quality, security and technological compatibility. Euro banknotes are produced jointly by the national central banks of the euro area countries. In order to ensure the necessary quantities for the initial phase, initial supplies will be lent by other national central banks.
In parallel, the BNB will join the Eurosystem's joint production pool and will start printing euro banknotes independently. All necessary quantities of banknotes will be provided well in advance of 1 January 2026, so that the changeover to the euro can proceed smoothly, orderly and without interruptions in cash circulation.
Banks started preparing for the euro quite early. Do you expect technical challenges?
The banking sector has indeed demonstrated a high level of readiness. This is to be expected, given its central role in the transition. Of course, such a process always brings technical challenges – especially in terms of system integration, data migration and customer service. These challenges are managed through detailed testing schedules, clearly defined coordination and constant communication. The BNB plays a central role in this process and maintains an active dialogue with all participants.
How will the BNB ensure the smooth circulation of cash, especially in remote areas?
This is a top priority. The euro changeover plan foresees detailed and timely logistical preparations, including pre-stocking of euro banknotes and coins at the BNB cash centres, commercial banks and other key participants in the monetary system. Particular attention is paid to remote and poorly served areas, where “Bulgarian Posts“ will play an active role, facilitating access to the new currency in settlements without a banking presence.
In January 2026, the dual circulation period will be in effect, during which the lev and the euro will be simultaneously legal tender. This transitional stage will facilitate the adaptation of citizens and businesses to the new currency, while ensuring continuity of payments and financial stability.
Dual price indication will begin on August 8, 2025 and will continue until the end of 2026. Will there be monitoring of price dynamics?
Yes. Continuous monitoring will be carried out under the leadership of the Council of Ministers and coordinated between the Consumer Protection Commission, the National Revenue Agency and the Competition Protection Commission. The aim is to ensure the correct conversion of prices and to prevent speculative increases and unfair trading practices.
The Bulgarian National Bank will support the process within its powers, including with regard to the exchange rate, payment systems and financial sector supervision. The European Central Bank's methodology for monitoring prices during the introduction of the euro will also be applied. The process will be transparent, based on systematic data collection and analysis, and will be carried out in close inter-institutional coordination.
The BNB has been signaling to banks several times in recent years that the real estate market needs to cool down. Do you expect this market to become even more active with the adoption of the euro and increased liquidity?
We are following this process with increased attention, also in the context of the general macroeconomic and financial environment. Indeed, the reduction of the minimum reserve requirement from 12% to 1% is a measure that will release additional liquidity in the banking system. However, this does not mean an automatic redirection of this liquidity to the real estate market or a sharp acceleration of credit expansion. Commercial banks' decisions are based on a number of factors, including regulatory requirements, risk assessment and expected profitability.
The BNB will continue to closely monitor the dynamics of the credit market and, if necessary, we are ready to use the available macroprudential instruments in order to limit potential risks. Our guiding principle remains that sustainable credit activity should be based on real economic and financial parameters - such as growth in real incomes, a high degree of solvency of households and enterprises, and stable employment - and not on speculative expectations of profitability or irrational behavior driven by short-term price signals.
The digital euro remains a poorly known topic for Bulgarian citizens. At what stage is the project and what is its goal?
The digital euro project is currently in the preparatory phase. A decision on its actual introduction has not yet been made. Its main goal is to provide citizens and businesses with a digital form of central bank money - as a supplement, not a replacement for available cash. The digital euro is designed as a means of adapting the euro to the conditions of the digital economy with an emphasis on ensuring the monetary sovereignty of the euro area, the sustainability of the payment system and equal access to safe and efficient payments.
The Bulgarian National Bank will deepen its participation in the discussions on this project within the Eurosystem. Our position consistently upholds key principles such as a high level of security, easy access for citizens and businesses, and full respect for personal data protection requirements. The development of the digital euro will be subject to careful assessment and broad public debate, with the aim of ensuring stability, trust and transparency in the process.
Beyond the emotional arguments - what are the real benefits and risks of joining the eurozone?
The benefits of joining the eurozone are substantial and long-term. They include the elimination of exchange rate risk, better financing conditions, greater predictability for businesses and households, and fuller integration into European financial markets. It is also expected to strengthen investor confidence, which would support growth and stability. These are lasting effects that will manifest themselves over time.
The risks that exist are mainly short-term and mainly related to inflation expectations, the adaptation of the business environment and the technical preparation of the various participants in the process. In order to be managed effectively, good coordination, consistent actions and active communication are necessary both between institutions and with society. Joining the eurozone is not an end in itself. It is a logical continuation of the process that began with the introduction of the currency board, went through our membership in the European Union and participation in ERM II and the Banking Union. From an economic and institutional perspective, the direction is clear and we must follow it professionally and responsibly.