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Bulgaria to join euro area on 1 January 2026

(www.ecb.europa.eu)
257 points toomuchtodo | 1 comments | 09 Jul 25 00:44 UTC | HN request time: 0.232s | 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. jochem9 ◴[09 Jul 25 05:31 UTC] No.44506615[source]▶
In the Netherlands there was a brief spike of inflation, but that was due to rounding up, definitely not converting 1 NLG to 1 EUR.

The inflation did correct itself the years after (aka lower than usual). The perception with many people still is that the euro made everything more expensive, but that's only based on feelings. The inflation numbers tell a different story.