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Bulgaria to join euro area on 1 January 2026

(www.ecb.europa.eu)
258 points toomuchtodo | 7 comments | 09 Jul 25 00:44 UTC | HN request time: 0.001s | source | bottom
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jmyeet ◴[09 Jul 25 01:21 UTC] No.44505485[source]▶
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.

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aopwiejfpoieajf ◴[09 Jul 25 01:45 UTC] No.44505603[source]▶
Even though the Bulgarian lev has been pegged to the Euro for decades at this point?
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1. dotancohen ◴[09 Jul 25 02:04 UTC] No.44505702[source]▶
Just as the Mark and the Franc were.
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2. bapak ◴[09 Jul 25 02:07 UTC] No.44505724[source]▶
I don’t think those two are comparable economies to Bulgaria 20 years ago.
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3. aopwiejfpoieajf ◴[09 Jul 25 02:28 UTC] No.44505820[source]▶
Surely they were not pegged for decades given that the Euro was introduced in 1998 and they transitioned fully in 2002?
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4. dotancohen ◴[09 Jul 25 03:10 UTC] No.44506037[source]▶
Thinking about it, the comparison really isn't that bad. West Germany had just reunited with the East, and France was definitely on a similar upward trajectory as Bulgaria is today.
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5. bapak ◴[09 Jul 25 03:16 UTC] No.44506058{3}[source]▶
When the EU was formed, its members' economies were comparable.

The lev was pegged to the euro in 1999, Bulgaria was roughly 80% poorer than the EU leaders

(I'm using PPP figures from ChatGPT to make these comparisons, I don't know if I'm making any sense)

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6. blahedo ◴[09 Jul 25 04:14 UTC] No.44506291[source]▶
It was pegged originally to the Deutschmark. If you look up a currency table the historic DEM has the exact same conversion rate as the lev will have.
7. dotancohen ◴[09 Jul 25 13:50 UTC] No.44510043{4}[source]▶
That supports my argument.