Bulgaria is set to adopt the euro on Thursday, but the move has been met with fear and uncertainty across the country.

Many citizens are expressing concerns that adopting the euro could lead to price increases and social and economic instability. 

Bulgaria, known as the poorest state in the European Union, is the 21st country to adopt the euro.

This year, a protest campaign was launched under the slogan “Save the Bulgarian Lev.” This has further exposed the public’s negative perception of the euro and fears of inflation.

But successive governments have consistently insisted on joining the eurozone. Supporters say the euro will strengthen the economy, strengthen ties with the West and keep it away from Russian influence.

The single currency euro was launched in 2002 with 12 countries. It has been expanding since then. Croatia will be the last to join in 2023. Bulgaria, however, faces particular challenges due to political instability, anti-corruption protests and repeated elections.

The country is heading for its eighth election in five years after the recent fall of a conservative government. According to Boryana Dimitrova, an analyst at Alpha Research, any problems with the euro are likely to be used as political weapons by anti-EU politicians.

She says such issues could become the basis for anti-EU rhetoric. While far-right and pro-Russian parties are leading the anti-euro protests, many rural and poor people are naturally wary of the new currency.

Bilyana Nikolova, 53, a grocer from the village of Chupren in northwestern Bulgaria, said she fears inflation will rise here too, saying she has heard from friends in Western Europe about price increases.

According to the European Union’s (EU) Eurobarometer survey, 49 percent of Bulgarians are still opposed to the euro. After a period of hyperinflation in the 1990s, Bulgaria pegged its currency to the German mark and later the euro. This has made the country dependent on the European Central Bank.

According to Georgi Angelov, a senior economist at the Open Society Institute, Bulgaria will become a direct participant in the decision-making process within the monetary union after adopting the euro. Bulgaria, an EU member since 2007, entered the euro’s ‘waiting room’ in 2020 along with Croatia.

ECB President Christine Lagarde has said that the benefits of joining the euro are “substantial”, citing ease of trade, low financing costs and price stability as the main benefits. According to her, small and medium-sized businesses alone can save about 500 million euros in exchange fees.

The tourism sector, which accounts for about 8 percent of gross domestic product (GDP), is expected to benefit particularly from the euro. Lagarde said that the impact on consumer prices will be modest and short-lived.

Based on past experience, its impact is estimated to be only 0.2 to 0.4 percentage points. But there are concerns that consumers, already suffering from inflation, could be burdened further. Food prices rose by 5 percent year-on-year in November, according to the National Statistics Institute, more than the eurozone average.