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Bulgaria to join euro area on 1 January 2026

(www.ecb.europa.eu)
265 points toomuchtodo | 12 comments | 09 Jul 25 00:44 UTC | HN request time: 1.286s | source | bottom
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decimalenough ◴[09 Jul 25 03:03 UTC] No.44506006[source]▶
Credit where credit is due: the EU gets a lot of flack for being bureaucratic, hidebound, sclerotic, whatever, but the single currency has been a success and it's still expanding, 26 years after its creation.

Also, the addition of Bulgaria means it's almost possible to travel from Spain to Greece entirely through the Eurozone, with only a thin sliver of Serbia or Macedonia in the way. (Assuming we include Montenegro and Kosovo in the Eurozone: technically they aren't, but for all practical purposes they are.)

It'll also be interesting to see who's next. Czechia is not far off but doesn't seem to be in a hurry, while Romania wants in but still seems to be a ways off. Poland and Hungary will stay outside unless there are major political changes.

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Roark66 ◴[09 Jul 25 06:12 UTC] No.44506791[source]▶
Polish here, very much against adopting the euro until our standard of living and growth rate matches Germany (no at least not for next 10 years). Why? Because the disadvantages far out weight the benefits for developing countries. The biggest issue is giving up one of the biggest instrument of control over the economy to a supra-national non-democratic organisation. Surely the monetary policy will follow what is best for the biggest economies (or at best the average) while local policy is way better tweaked towards local needs. The best example of this is money supply. The money supply ideally should match the economy growth rate +X so there is tiny inflation (and definitely no deflation). This growth rate is very different in "old EU" and "new EU" countries. So what happens? In time things get more expensive much faster in countries that grow faster while incomes stay the same. This is a huge negative and this is on top of price increases happening on "day 1" due to rounding up during conversion.

Historically the biggest benefit that was sold as something to outweigh this was a claim that "inflation will be low" and big inflation spikes are impossible. This came about from the short sighted view that all inflation stems from printing money and by giving up our control over it to somebody else we somehow "protect ourselves". This was proven wrong during covid when inflation was vastly different in let's say Latvia and Germany despite sharing a currency.

So what is the bottom line? Is euro all bad? No, it is very useful so we have a common currency in the euro zone that is not controlled from across the ocean. This is a huge benefit, but the same benefit is achieved by having it be a second currency like it is now in Poland rather than the only currency. (you can pay in euros in almost everywhere if you prefer as well as get it from cash machines etc)

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wolvesechoes ◴[09 Jul 25 06:31 UTC] No.44506912[source]▶
Controlling currency is one of the most important aspects of being a sovereign country. Poland should adopt euro not sooner than Denmark and Sweden.
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1. Thlom ◴[09 Jul 25 06:39 UTC] No.44506947[source]▶
Denmark have pegged the krone to the euro. They haven't adopted it, but tied themselves to the Euro. They still maintain control of their currency, but most of that control is used to maintain the value to the euro.
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2. Svip ◴[09 Jul 25 07:12 UTC] No.44507108[source]▶
That's because the powers that be want the euro, but the people didn't. They were asked in 1992, 1993 and 2000; and effectively they said no to the euro every time (yes, I know; in 1993, the euro was specifically opted out, but the fact that it was approved when the year before a referendum with the euro was rejected suggests – at least partially – that it was a rejection of the euro (among other things)). Denmark thus came into the EU with 4 opt-outs (one of which has since been rescinded (defence) and one which turned out not to matter (union citizenship)), and they can only be removed with referendum (see for instance the euro one in 2000).

Prior to the adoption of the euro, the Danish crown was pegged to the D-mark (since about the mid-1980s), because Germany was the biggest export market for Denmark (still is), and thus having a currency that's stable towards what the Germans are using has been good for Danish exports (less sure how relevant that still is). (Sidebar; had the original motivation of Alternative für Deutschland been successful and abandoned the Euro for a return to the D-mark (neumark?), it would have put Denmark in an awkward position.)

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3. consp ◴[09 Jul 25 07:35 UTC] No.44507230[source]▶
This all reads as symbolic nationalist policies with an added burocracy thus costing more than it should. "We need own coin to control [insert nationalist thing here]" but in practice you won't and never did.

The last time I was in Denmark my bank nicely charged me for the conversion despite the coin being fixed to the euro. It is just a money costing machine which adds no value.

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4. ifwinterco ◴[09 Jul 25 07:59 UTC] No.44507357{3}[source]▶
If (when?) there's another Euro crisis, being pegged gives you a lot more room to manoeuvre than being actually in the Euro. If necessary de-pegging would be disruptive but very much possible, if you're fully in the Euro then you are riding the train to its destination whether you like it or not
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5. p2detar ◴[09 Jul 25 08:30 UTC] No.44507562{4}[source]▶
De-pegging would require selling your euro reserves and buy other currencies. I wouldn’t call it disruptive but a disaster. You’ll end up getting enormous loans that generations after you will have to pay.
6. wolvesechoes ◴[09 Jul 25 08:58 UTC] No.44507738{3}[source]▶
If being nationalistic means preferring that currency in your country is controlled by the government you have elected and not by ECB that you have zero control over, then yes.

Ask Greeks how much they enjoyed ECB involvement.

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7. decimalenough ◴[09 Jul 25 09:17 UTC] No.44507847{4}[source]▶
The Danish krone is pegged to the euro, meaning it's already effectively controlled by the ECB.
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8. giingyui ◴[09 Jul 25 09:22 UTC] No.44507879{3}[source]▶
If they choose the policy that is being imposed to them by the elites they are enlightened, otherwise they are nationalistic ignorants.
9. Svip ◴[09 Jul 25 09:37 UTC] No.44507951{3}[source]▶
As noted, the politicians wanted to switch to the euro; but it's the voters who said no. Twice or thrice, depending on how you count. That isn't a case of "symbolic nationalistic policies", but rather a state apparatus trying to get around the rejection, whilst sticking to the text of the referenda (but perhaps not the spirit of it).
10. wolvesechoes ◴[09 Jul 25 10:11 UTC] No.44508140{5}[source]▶
It is not fully pegged, and though it ties their hands somewhat, this is not "effectively" the same as adopting the euro. Krone still can be un-pegged if Denmark decides to do so.
11. rhubinak ◴[09 Jul 25 11:57 UTC] No.44508915{4}[source]▶
By adopting euro you get a seat at the ECB and can influence monetary policy of the whole Eurozone.
12. zosima ◴[09 Jul 25 12:56 UTC] No.44509483{5}[source]▶
It can be unpegged at a moments notice. Euro countries have a lot more work to break free.