site.btaParliamentary Budget and Finance Committee Clears Euro Adoption Bill

The Parliamentary Committee on Budget and Finance cleared the bill for the adoption of the euro submitted by Cabinet on second reading on Thursday. The bill is proposed to fulfil Bulgaria's strategic goal of joining the eurozone. Its purpose is to ensure the smooth introduction of the euro in Bulgaria and to enhance transparency and awareness about the adoption of the single European currency in the country, the Cabinet position says.

The bill outlines essential rules for the transition to the single European currency, including guidelines for currency conversion and rounding. Transitional periods will be introduced to allow citizens to adjust to the new currency.

The bill mandates a dual pricing period where prices and monetary amounts are displayed in both lev and euro. This requirement begins one month after the Council of the European Union's decision on Bulgaria's adoption of the euro takes effect and continues for one year following the euro's introduction.

A dual circulation period for the lev and the euro is introduced. Within one month from the euro adoption date, both the lev and the euro will be legal tender. After this period, the lev will cease to be legal tender. The bill stipulates that the Bulgarian National Bank (BNB) will exchange lev banknotes and coins for euros at the official exchange rate, free of charge and without any volume or time constraints. During the first six months following the adoption of the euro, this free exchange from lev to euro will also be available at lending institutions (banks). Bulgarian Post EAD will offer complimentary exchanges of lev banknotes and coins for euro in areas with no offices or branches of lending institutions.

Caretaker Deputy Prime Minister and Finance Minister Lyudmila Petkova reminded attendees that the bill had been coordinated with the European Commission and the European Central Bank. She said that the Finance Ministry has presented a written opinion on the two proposals and does not support them. She also said that the period of dual circulation in countries that recently adopted the euro lasted two weeks, whereas in Bulgaria, it is planned to last one month.

"The extension of the dual circulation period will complicate matters for both businesses and citizens rather than provide relief," Petkova said. She explained that this involves managing significant transactions in both lev and euro, maintaining accounts, and continuous recalculations due to the euro becoming the official currency from a specific date, complicating things for businesses and citizens. Regarding the second proposal, Petkova said that in countries that have adopted the euro, citizens begin to convert their cash holdings into euros earlier following the Council of the EU's decision on joining the eurozone. She added that the BNB has no set deadline and can convert lev to euro indefinitely, unlike the Bulgarian Posts, which faces a time restriction.

The bill does not specify the date or exchange rate for adopting the euro, which will be set by the Council of the EU and Bulgaria through a unanimous decision, as outlined therein.