site.btaUPDATED January 1, 2026, Is Good Target Date for Bulgaria's Euro Adoption, but Decision Must Be Made in Time - Non-Food Traders Association Director

January 1, 2026, is a good target date for adopting the euro, but the decision must be made in time - no later than the end of the first half of this year - to ensure businesses can transition smoothly, Non-Food Traders Association (NFTA) Executive Director Galin Popov said in an interview for BTA.

In Popov’s words, it is important to have a clear timeline of at least six months between the decision to introduce the euro in Bulgaria and its practical implementation. If this timeframe is shortened for any reason, it could lead to higher costs for services needed by the sector - particularly software activities and staff training - due to sudden high demand and ultimately to lower the quality of services, he said.

Commenting on the readiness of the non-food trade sector for Bulgaria’s entry into the euro area and what still needs to be done, Popov said that while key laws and regulations were adopted in mid-2024, Ordinance 18 still needs to be passed. He noted that this ordinance is critical for traders, as it governs their interactions with the state treasury, the National Revenue Agency. Popov expressed optimism that the ordinance would soon be adopted following the formation of the regular government.

Once the ordinance is in place, traders will have a clearer understanding of the necessary adjustments and can begin working on software updates and process organization within their companies.

Popov also referenced an informal NFTA study from mid-2024, which highlighted the need for the State to provide practical information to traders. “The State has focused its efforts on consumers and that is understandable. But traders are a vital part of society and the market. They also need specific information on what to expect and when, to avoid disruptions,” he said. About two-thirds of NFTA members expect to receive this practical information, while around one-third are hoping for proposals from government bodies to offer training on activities related to the euro adoption.

The NFTA Executive Director dismissed concerns about smaller companies going bankrupt due to the euro transition. He added that such bankruptcies are more likely tied to the companies’ management issues rather than currency changes.

Commenting on the impact of Bulgaria’s full accession to Schengen, Popov said that free movement is crucial for businesses, both in terms of faster access to consumers and traders and product costs. He noted that this is expected to boost Bulgaria’s gross domestic product (GDP), with previous analyses projecting an increase of over BGN 1.5 billion.

Following is the full transcript of the interview:

Bulgaria became a full-fledged member of the Schengen area on January 1, 2025. What does this mean for businesses, especially non-food traders? What impact will Schengen accession have on them?

- The Schengen area allows over 400 million people to travel freely between member states without border controls. Every day, around 3.5 million people cross internal borders to work, study, or visit family and friends, while nearly 1.7 million have a permanent address in one Schengen country but work in another. Europeans make about 1.25 billion journeys within the Schengen area annually, greatly benefiting the tourism and cultural sectors.

For businesses, freedom of movement is essential. Both in terms of faster access to consumers or traders and product costs. This is expected to result in an increase in the gross domestic product, with current analyses projecting it to exceed BGN 1.5 billion. GDP growth is projected at around 2.4-2.5% this year and around 3% next year. Other countries’ experiences suggest these figures could rise exponentially. Here we should note the adoption of the single currency as a factor - something that has not yet happened here, although the legislative basis is already ready. After a very successful 2024 for tourism, 2025 is expected to be even better thanks to the removal of border controls.

Have you estimated the sector’s losses in recent years due to our country being kept out of Schengen?

- While there aren’t precise figures for the non-food sector specifically, broader estimates for Bulgarian businesses suggest annual losses of BGN 1.2 billion.

What about this country’s other strategic goal: euro area membership? When do companies is the non-food sector expect this to happen?

- The main laws and regulations were adopted in the middle of last year, but Ordinance 18 remains pending. This [ordinance] is crucial for traders, as it governs their interactions with the State’s treasury, with the National Revenue Agency. It has been left pending in the Finance Ministry for quite some time, but I hope that now that we have a regular government in place, the ordinance will be adopted soon. Once it is in place, traders will have a clearer understanding of the necessary adjustments they need to make and can begin working on software activities and process organization within their companies. When the admission date becomes clear - hopefully at least six months before the actual admission - the planned staff training for the adjustments will begin across the companies’ various departments.

Are businesses and your sector ready for the euro area accession? What still needs to be done?

- In addition to everything mentioned above, there are planned activities that require the adoption of relevant decisions to be implemented - changes in companies related to payments in euros, adjustments across commercial, legal, accounting, finance and audit departments. But there must be predictability and sufficient time that will allow these processes to go smoothly. I always say this – it is important to have a clear timeline between the decision to introduce the euro in this country to its practical implementation. Because if this timeframe is shortened for any reason, it could disrupt the entire market system. This would lead to higher costs for certain services needed by the sector due to a sudden surge in demand. It is possible that the quality of those services may ultimately not be good. I am speaking mainly of software activities and staff training.

As an association, we believe that January 1, 2026, is a good target date for the euro adoption, but the decision must be made in time, no later than the end of the first half of this year.

The Non-Food Traders Association has been part of two working groups under the Coordination Council for the preparation of Bulgaria for euro area membership since early summer 2024. How is the work of these working groups progressing?

- The working groups did a tremendous work last year. As a result, the euro changeover bill was adopted, along with some regulations and decisions affecting both the financial and non-financial sectors. There is currently not much activity in these working groups, as the actual decision on the introduction of the single currency in the country is still pending.

What steps should the State take to ensure a smoother transition to the euro for Bulgarian businesses?
According to an informal NFTA study from mid-2024, the State needs to provide traders with practical information. The State has focused its efforts on consumers and that is understandable. But traders are a vital part of society and the market. They also need specific information on what to expect and when, to avoid disruptions. About two-thirds of NFTA members expect to receive this practical information. Around one-third are hoping for proposals from government bodies to offer training on activities related to the euro adoption.

Is there a risk that smaller companies might go bankrupt after our country joins the euro area?

- No. The introduction of the euro or any other currency cannot be a direct cause of bankruptcies. Beyond objective economic factors, bankruptcies stem from companies’ inability to remain profitable in the market. Thus, bankruptcies have to do with the companies’ management issues rather than currency changes.

How much have companies in the sector spent so far to prepare for euro area membership, and have you estimated the additional costs if euro adoption is delayed by a year?

- As part our work over the past year, the NFTA has gathered data from its member companies, showing that costs vary from tens of thousands to several hundred thousand leva per company. It is important to note that this covers preliminary work only. According to an estimate by the Association of Banks in Bulgaria, switching to single-currency payments will cost banks some BGN 500 million. The expenses for businesses are likely to be even higher.