Template-Type: ReDIF-Article 1.0

Author-Name: Charles Enoch
Author-Workplace-Name: Consultant on Central Bank Issues and Regional Integration
Author-Email: Cenoch99@gmail.com
Author-Person:

Author-Name: Anne-Marie Gulde
Author-Workplace-Name: Consultant on International Financial and Debt Issues
Author-Email: Aguldewolf@gmail.com
Author-Person:

Title: Bulgaria's Path to the Euro: The Role and Legacy of the Currency Board

Abstract: Bulgaria's monetary integration with Europe started with the creation of the
currency board in 1997. This paper traces how hard constraints on central bank
financing and money creation, combined with political consensus forged in crisis,
restored credibility, helped to attract investment, and supported deep structural
change and privatisation. Despite the early success, however, Bulgaria's trajectory
from crisis stabilisation to EU accession in 2007 and eventually to ERM II entry in
2020 and euro adoption was unusually long, shaped by a combination of persistent
pre-crisis imbalances, the global financial crisis and the resulting stricter post-crisis
European prudential demands. While Bulgaria's monetary policy after the creation
of the currency board was determined by the anchor currency, euro entry still brings
additional gains, such as representation in ECB decisions, lower currency and country
risk, deeper financial market access and reduced transaction costs, while remaining
costs are mostly transitional. Monetary success, however, does not fully resolve
Bulgaria's broader institutional and demographic challenges.

Classification-JEL: E42, E52, E58, F31, F33
Keywords: hyperinflation, currency board, stabilisation, euro adoption, monetary integration
Pages: 5-26
Volume: 25
Issue: 1
Year: 2026
File-URL: https://hitelintezetiszemle.mnb.hu/sw/static/file/fer-25-1-st1-enoch-gulde.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:25:y:2026:i:1:p:5-26