The euro is one of the brightest symbols of European identity and belonging. The euro is the national currency of 346 million Europeans from 20 Member States of the European Union. Today, the euro is the second most common currency in the world after the US dollar. The experience of each country participating in the euro area is important for us, as it brings objective information about the process of introducing the euro and the real effects on the economy of the respective country.

This is what Nina Stoyanova, Deputy Governor of the Bulgarian National Bank, Head of the Banking Department, said during the 25th Jubilee National Meeting of Financiers from the Municipalities in the Republic of Bulgaria, organized by the NCOR in the Golden Sands resort. The statement of the BNB Deputy Governor is published on the website of the Central Bank.

Recently, widely participated events are often organized to discuss issues related to the introduction of the euro, in which representatives of the National Association of Municipalities actively participate. The last such event was held on May 9 this year conference on "The role of organized civil society in the process of Bulgaria's accession to the euro area".

It was organized by the Economic and Social Council - a national consultative body expressing the will of civil society structures on issues of economic and social development. Tomorrow in Sofia there will be a similar forum by the Union for Private Economic Enterprise on the topic "The Eurozone - advantages and challenges", recalls Stoyanova.

In order to raise awareness on the topic of the euro, information materials with questions and answers on this topic have already been published on the websites of the Ministry of Finance and the BNB.

A draft Law on the introduction of the euro has also been prepared, which regulates the rules and procedures related to the introduction of the euro in the country. This law provides for the conversion of account amounts from BGN into euro to be made automatic and free of charge on the day of the introduction of the euro in Bulgaria. There is no reason to expect a change in terms of the fixed exchange rate of BGN 1.95583 per EUR 1, with which Bulgaria joined the European Exchange Rate Mechanism nearly three years ago.

In the first one month from the date of the introduction of the euro, the lev and the euro will be in circulation simultaneously, with both currencies having legal tender status. After the expiration of this month, the euro will remain the only currency in our country. In the first six months of the introduction of the euro, the exchange of banknotes and coins from levs into euro will be free of charge in banks and Bulgarian Posts EAD, and their exchange with the BNB will be free of charge.

The draft Law on the introduction of the euro will set out a consumer protection principle, which ensures that the conversion of prices and other values from levs into euros will not put consumers in a financial disadvantage than they would have been if the euro had not been introduced, as well as the necessary control and sanctions mechanisms, Nina Stoyanova recalled.

One of the main arguments that are put forward against the introduction of the euro is that it can lead to an appreciation of goods, a decrease in the incomes of the population or impoverishment. Objective data and studies on the economies that have joined before us, especially from the countries of Eastern Europe, with which we are more closely comparable, show the opposite, says the BNB Deputy Governor.

Eurostat data for some of the most recent euro area accession countries show negligible inflation differences for the year of euro adoption of the order of 0.3 - 0.7 per cent for Estonia and Latvia, while Lithuania even experienced deflation when comparing the harmonised index of consumer prices for the year of adoption of the euro against the annual average for the previous 12 months.

This trend is confirmed by the experience of Croatia, which joined the euro area in early 2023. The calculated effect of the transition to the euro on inflation in Croatia is again low - of the order of 0.3-0.5% monthly increase, taking into account on an average annual basis the data for the months from January to April 2023.

In this regard, concerns that the adoption of the euro will lead to significant inflation are unjustified and rather due to insufficient awareness. The data show that despite a temporary and slight increase in some cases, inflation has steadily decreased since the country joined the euro area.

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For the first 4 months since the adoption of the euro, monthly inflation in Croatia shows a lasting decrease - from 12.7% in December 2022 to 8.9% in April this year. If we compare the latest inflation data, measured by the harmonized index of consumer prices as of April 2023, in the euro area it is 7 per cent, while that for the same period in Bulgaria it is 14 per cent, in Romania it is 13.1 per cent, and in Hungary it is 20.8 per cent, Stoyanova says.

The increase in the average wage in the countries that joined the euro area before us also shows a strong upward trend. We can look at the longer-term impact, for example in the last acceding countries Lithuania (2015), Latvia (2014) and Estonia (2011). Five years before these countries joined the euro area, their average monthly salary ranged from 550 to 700 euros.

When joining the euro area, it was in the range of 700-800 euros, meaning the growth for a five-year period before the introduction of the euro was between 5 per cent for Latvia and 30 per cent for Estonia. For 2022, average wages in these countries are in the range of 1400,1900 - 92,164 euros, which is an increase of between two and three times - from 2022% for Latvia to 995% for Lithuania, compared to the corresponding year of the introduction of the euro. For comparison, the average gross monthly salary in Bulgaria at the end of <> amounted to EUR <>. The cited data show that the introduction of the euro boosts economic development and increases people's well-being, Stoyanova said.

Full participation in the Economic and Monetary Union creates prerequisites for full integration into European structures and extracting the maximum potential of participation in the single European market, including by eliminating the need for currency conversion from levs into euro and elimination of transaction costs.

The data and experience of the countries that joined earlier than us show that the introduction of the euro accelerates the real growth of the economy, competitiveness and investment, and the effect for people is related to sustainable development and convergence with average European incomes, Nina Stoyanova told the participants in the forum.

Adoption of the euro