Bulgaria to join euro area on 1 January 2026
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Bulgaria to join euro area on 1 January 2026
1–10 of 340 posts
Re: Bulgaria to join euro area on 1 January 2026
#2This 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.
Re: Bulgaria to join euro area on 1 January 2026
#3Nice. It’s amazing to see the progress Bulgarians have made in the last 20 years after joining the EU. I can imagine it hasn’t been an easy process.
Re: Bulgaria to join euro area on 1 January 2026
#4This 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…
Even though the Bulgarian lev has been pegged to the Euro for decades at this point?
Re: Bulgaria to join euro area on 1 January 2026
#5This 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…
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Re: Bulgaria to join euro area on 1 January 2026
#6This 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…
The Euro expansion is the mechanism the EU has to export inflation to other countries, similar to the way the US exports inflation with dollar trading across the world. When the easy expansion stops, this is when the debasement will start to occur. The US is already at this point, very soon the dollar will be less valuable as less trading is happening in USD.
Re: Bulgaria to join euro area on 1 January 2026
#7This 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…
Even though the Bulgarian lev has been pegged to the Euro for decades at this point?
Just as the Mark and the Franc were.
Re: Bulgaria to join euro area on 1 January 2026
#8Re: Bulgaria to join euro area on 1 January 2026
#9This 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…
I was in Belgium the week the Belgian franc converted to Euros. I saw no price changes other than rounding up or down to the nearest Euro equivalent price. If memory serves some stores showed prices in both denominations for a while which would not have allowed for stealth inflation to happen.
The currencies were pegged for a period before then so other than niche cases there really weren’t opportunities for massive price increases.
Re: Bulgaria to join euro area on 1 January 2026
#10Nice. It’s amazing to see the progress Bulgarians have made in the last 20 years after joining the EU. I can imagine it hasn’t been an easy process.
Two things that surprised me when I spent a couple of months in Bulgaria:
* Bulgarian support for the EU is pretty low and people didn't think it made their life much better
* Bulgarian support for Russia is very high, like 50%, probably due to their historic help in kicking out the Turks