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Bulgaria to join euro area on 1 January 2026

(www.ecb.europa.eu)
258 points toomuchtodo | 1 comments | 09 Jul 25 00:44 UTC | HN request time: 0.194s | source
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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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1. mrtksn ◴[09 Jul 25 04:52 UTC] No.44506431[source]▶
Soon all the prices will be listed in both of the currencies and they will be kept as that for another six months after the adoption.

The country already experienced quite a bit of inflation last years, regardless of not being in the euro. I don’t see why the change of the currency that is already pegged to euro since the creation of Euro will cause any inflation beyond the rounding and the rounding is for 1:1.95583 and that often provides rounding sown incentive as 4.99 becoming 2.04 and 4.49 becoming 2.2957

A more realistic concern can be that Bulgaria might start borrowing irresponsibly. Currently Bulgaria's debt to GDP is just around %22, which is very low.