Bulgaria's Euro Transition: Navigating Economic Turbulence

Bulgaria plans to resubmit its euro-denominated 2026 budget to parliament. Protests erupted against proposed tax hikes and corruption. Prime Minister Rosen Zhelyazkov aims for dialogue with opposition, workers, and employers. Concerns over sovereignty and inflation impact euro adoption. ECB warns of potential inflation rise.

Bulgaria's government announced plans to resubmit its 2026 budget to parliament, marking its first outline drafted in euros. This decision follows significant protests in Sofia against proposals to raise social security contributions and taxes, measures intended to boost government spending.

Prime Minister Rosen Zhelyazkov, leading a minority government, emphasized the need for further consultations with opposition parties, workers, and employers. Despite the initial approval of the budget plan by a parliamentary committee, the need to 're-establish' dialogue has been underscored by protesters voicing concerns over corruption and financial burdens.

While the transition to the euro is set for January 1, public apprehension remains high, with fears of price hikes and sovereignty loss. ECB President Christine Lagarde has highlighted potential inflationary impacts as Bulgaria prepares to join the euro zone.

(With inputs from agencies.)