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Bulgaria to join euro area on 1 January 2026

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Re: Bulgaria to join euro area on 1 January 2026

#331

Earlier quoted context omitted.

By many metrics (life expectancy, inequality, literacy, poverty rates) the US is a third world country.

No, it really isn't. Although there are some pockets of poverty that come close.

Life expectancy in US is 78 compared to 82 in Europe.

Child mortality is closer to Africa than Europe.

Again, about children, US has the second poorest children among the 35 most developed countries in the world.

More than half Americans have their literacy prophiciency below elementary level.

There's almost a million homeless people in US, that's more than in several rich countries like Japan, Italy, Poland, Germany, etc, combined. Hell I've never seen bidonvilles and tents all around cities in Europe or most of Asia like I've seen in LA or SF.

Inequality in US is at south America level.

US has more incarcerated population than all developed countries combined.

Re: Bulgaria to join euro area on 1 January 2026

#332

Earlier quoted context omitted.

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 bes…

Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone. You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)). Do you have to exchange money when traveling abroad? Now imagine buying/selling stuff abroad as a company and multiply that by a lot. You get…

>Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone.

This is my argument exactly. A seat gives a certain small amount if influence, the resulting policy will be an approximation of what is best for everyone. This may be pretty far from what is best for a developing country with fast growth if the majority is well developed countries with low growth.

Imagine you and your neighbour decide to pool your money and invest together. He is 65 years old and has 50k EUR, you are 21 years old and you have 1k. He prefers to put his money in a bank savings acct that will allow him to withdraw anytime (he's retiring soon) and he doesn't want any risk. You on the other hand don't mind risk at all, but you need a high rate of return (stocks would be good for you, maybe of the more "adventurous" kind).

If you pool your money he will have much more to say so you end up maybe with a 6 months term savings deposit to get a little more gain. You're both unhappy because that is not enough profit to you and it still locks up his money preventing him from choosing an early retirement. Compromises sometimes work for both sides, sometimes they don't work for anyone...

>You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)).

You can get Euro denominated mortgages in Poland as well. As well as Swiss Frank, Dollar etc. A country does not have to get rid of its currency for people to enjoy lower interest rates in other currencies.

You can make an argument if you earn in PLN and take a mortgage in EUR it exposes you to the currency risk and it does. It is your personal choice. But there are plenty of jobs (usually higher paying) that pay a set amount of EUR or USD and it's often these kinds of people for whom these mortgages make sense.

We even have a long running scandal involving almost a million of people that got Swiss Frank mortgages over a decade ago that had interest rates below 1% and the banks structured these deals in such a way they made a killing on exchange commission. Basically people didn't realise they had to pay in PLN and the mortgage provider would convert to CHF applying their exorbitant conversion rates. There was no way to just pay in CHF. But this story is over a decade old and people have learned the lesson.

Re: Bulgaria to join euro area on 1 January 2026

#333

Earlier quoted context omitted.

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 bes…

Thank you for your interesting comment. > 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. Could you perhaps expand on this effect, ideally in a mechanistic manner, or point me towards a source that explains the influencing factors and outcome…

I've learned this long time ago. Probably early 2000s when there was the debate about joining the EUR.

I thought the basic explanation about money supply was sufficient, but I can try expanding on this.

A typical medium sized country having its own language that has had its own currency for a long time is much more internally economically integrated than externally. We can simplify this by saying huge majority of businesses take part in economic activity within the country, not outside.

This gives us some basis to consider it in separation to it's neighbours even if they are in a single market (smaller countries have less separation, bigger countries more, many factors influence the depth of separation but it exists strongly in countries like Poland).

So this is why it makes sense to talk in terms of money supply in terms of this "island" of economic activity regardless if it has its own currency or shares another.

The we have certain amount of GDP growth each year. More goods and services are produced each year. But simplifying, let's say you and your neighbor are on an island and you have 52 tokens with witch you trade. You catch fish and he works in a field of wheat. You pay him 52 tokens over the course of the year for his wheat and likewise he pays you the same for the fish (one per week for a price of one token).

Suddenly you find a net on the beach and you don't need to catch the fish with a DIY rod. You can catch 5 fish per week rather than 2 of which you sold 1. Now you have 4 fish per week to sell, but the guy only has 1 token per week. So if you want to sell all your fish you have to drop the price to 0.25. You do double the work (the nets are heavy) you get 4x the fish and yet you get the same tokens and wheat. Not fair. So you don't catch more fish.

This is why we need money supply to grow (or be procured by exports, but let's leave this complex topic for now) if the total of goods and services grows too. Ideally at the same rate or slightly more so goods do not depreciate in price.

I already mentioned one reason why deflation is bad, it demotivates producers from growth. Second reason is many costs are static, so it may send them into bankruptcy if others sell more than them at diminished prices. The third reason can also illustrate why we need some inflation.

The inflation is necessary for people to have an incentive to invest their money rather than stuff them into a mattress. If we have deflation it literally makes sense not to spend your money today, because you will get more goods for it tomorrow. Until everyone does this and prices go so low half of business go bankrupt.

So this is why you need money supply to slightly exceed the GDP growth. This subject can be as simple or as complex as you want. But there are basic truths that work on all levels of complexity. This is one of them.

Re: Bulgaria to join euro area on 1 January 2026

#334
post #29

Earlier quoted context omitted.

I’m Belgian. This is correct. Even now, some people here still convert euros to francs to get a grasp on the value.

This feels odd to me. The only people I can really see doing this is ones that were 70+ when the Euro was introduced.

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Re: Bulgaria to join euro area on 1 January 2026

#335

Earlier quoted context omitted.

By many metrics (life expectancy, inequality, literacy, poverty rates) the US is a third world country.

You must be American. Only Americans hate their country that much.

Polish/Italian sorry.

I did study at Ohio State for a semester and visited US multiple times tho.

Re: Bulgaria to join euro area on 1 January 2026

#336

Earlier quoted context omitted.

Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone. You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)). Do you have to exchange money when traveling abroad? Now imagine buying/selling stuff abroad as a company and multiply that by a lot. You get…

>Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone. This is my argument exactly. A seat gives a certain small amount if influence, the resulting policy will be an approximation of what is best for everyone. This may be pretty far from what is best for a developing country with fast growth if the majority is well developed countr…

> This is my argument exactly. A seat gives a certain small amount if influence, the resulting policy will be an approximation of what is best for everyone. This may be pretty far from what is best for a developing country with fast growth if the majority is well developed countries with low growth.

The point is that all of the countries in the EU are well developed countries with similar growth and closely tied economies. The example you have given would be more accurate if you'd compare a 65yr old with 50k savings and a 55yr old with 40k savings. What would be the (ideal) alternative? Having custom currency with policy tailored for each region? Each industry? Each person? Sometimes there's more value in unity.

> You can get Euro denominated mortgages in Poland as well.

Have you tried getting one? I did. The bank deduces 10-15% from your income due to currency risk when calculating interest rate and max loan amount. There are plenty of folks working abroad and earning EUR instead of local currency. Ask them about their opinion on this.

Re: Bulgaria to join euro area on 1 January 2026

#337

Earlier quoted context omitted.

By adopting euro you get a seat at the ECB and can influence monetary policy of the whole Eurozone.

The same way as having the seat in the UN's Security Council gives you the influence, but in the end France has little to say when compared with US or China. Germany even without any representation in ECB will have much more to say than other countries. Because in the end it is a real political power that allows anyone to make decisions.

The point is that all of the countries in the EU are well developed countries with similar growth and closely tied economies. I can't imagine a monetary policy that would benefit one state while at the same time damaging the other one so much it would negate all the benefits of joining Eurozone.

Re: Bulgaria to join euro area on 1 January 2026

#338

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…

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 bes…

It's unfair to compare Poland with Baltics due to the size and diversity of the economies but adopting the Euro there has coincided with massive economic growth. I also think it's rather likely that comparable economic growth could have been achieved without it but it's certainly easier to travel and trade.

Re: Bulgaria to join euro area on 1 January 2026

#339

Earlier quoted context omitted.

Except if you are a Finnish person who lives right next to Sweden (SEK) and Norway (NOK) who are not using Euro (and Russia but that's a different story).

Was it any easier when Finland was using the markka?

Back in the late 80s, when you wanted to convert your foreign currency to markka, you had to go to a bank and fill out a form. Much friction.

Re: Bulgaria to join euro area on 1 January 2026

#340

Earlier quoted context omitted.

In some places I gather that pretty much happened during https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis... . (I happened to be in India at the time, but where I was it was more just extreme discontent with resignation, rather than threatening fracture.)

The discontentment arose because it was extremely poorly planned, and failed to address the very problems it was 'trying' to solve. It is very unlikely for a state government to implement a local currency and introduce more friction to an already painfully bureaucratic system; it is a politically disastrous move. > Monetary policy is government policy. The ruling party is seldom uniformly popular across their entire…

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