Comment by Veselin Stoynev:
Will Bulgaria Enter the Eurozone in 2026 is the main political question of 2025 for both the ruling party and the opposition. The variety of interpretations about the current state of Bulgaria's public finances began with the rate of inflation, which is one of the criteria for membership in the Eurozone. First, GERB announced that it was 0.1 points above the average for the Eurozone, while PP-DB countered that the practice is to remove the country with the lowest indicator from the reference list (in this case Lithuania), as happened with the accession of Croatia, and then we fully meet the criterion. To top it all off, the leader of “Vazrazhdane“ Kostadin Kostadinov accused the NSI of falsifying inflation data.
Nervous haste
Later it turned out that the more serious indicator was the other criterion - the budget deficit. The rulers trumpeted an 18 billion leva hole in the budget, and Finance Minister Temenuzhka Petkova got tangled up with some 400 million for January - minus or plus they are in the budget. The opposition insisted that the current budget was below 3% as of December, as in previous years, without specifying when the accounts were on a cash basis, when on an accrual basis. And it raised the question of whether the deficit was actually planned to meet the large salary increases, especially in the Ministry of Internal Affairs and the services, voted in laws last year, which, however, have yet to be covered as budget expenses. And the government blamed the deficit on the PP-DB and personally on Assen Vassilev, who increased the debt and the deficit as the official and regular Minister of Finance.
All this noise could not have gone unnoticed by the European Commission and the European Central Bank, which will make the decision on our admission to the eurozone. And during her meetings with them, Minister Petkova probably heard unofficially their serious reservations about what we can hope for if we now request a convergence report, as well as whether to request it only after we present the 2025 budget and the budget framework for the following 3 years. Finally, the option remained to request the report in the second half of February, when the budget is also prepared.
The government's dilemma
The question before the government is first whether they even want Bulgaria to quickly enter the eurozone and whether they can achieve it. And the answer to the question is above all political. Because in order to meet the requirement for a deficit of up to 3%, expenses must be cut and/or revenues must be increased (which almost certainly means raising taxes, most likely VAT). GERB and its coalition partners cannot give up the drastic increases in incomes in the Ministry of Interior and the special services promised in laws, because they themselves voted for them last year, and GERB also has a serious electoral and personnel connection with this sector. BSP and ITN have long stated positions in favor of postponing the eurozone.
However, if at the end of February the cabinet refuses to submit a request for a convergence report, no matter how well-founded the motives from a managerial point of view are, or if it submits a request, but the response after a few months is negative and Bulgaria misses the 2026 deadline for EU membership, GERB as a leader in government and an Euro-Atlantic formation will suffer serious image damage. Because the greatest legitimization of the “Zhelyazkov“ cabinet, welcomed at its launch with a good credit of public trust, will be to be crowned by the middle of the year with approval for Bulgaria to enter the eurozone from January 1, 2026. Failure would mean GERB's inability to be a leader in achieving key national goals and to assume the liabilities of its participation in a heterogeneous and parceled-out coalition of private interests.
The opposition's chance
The parliamentary opposition can push the ruling party back and forward towards the eurozone at the same time. The anti-European “Vazrazhdane“ warned that it would take the people out onto the streets and that it would once again try to introduce a referendum against the euro. From “We continue the change“ and prematurely raised the possibility of a vote of no confidence in the cabinet, which has become a central media topic in recent days.
The leader of “Vazrazhdane“ even passively defended the government, inventing a constitutional ban on requesting a vote of no confidence in the first 6 months of the cabinet. “Democratic Bulgaria“ exerted constructive pressure with legislative proposals for reforms in the security sector and other measures to limit public spending, and with a demand that the cabinet present a roadmap to the euro.
Who will GERB be with – with PP-DB or with “Vazrazhdane“
If GERB chooses the path of postponement, it can use as an argument the pressure of “Vazrazhdane“, which will radicalize people's fears of the euro, declared in the sociological surveys – the society is not yet convinced, we must be completely ready, we will not rush.
If it chooses the path of accession from next year, GERB can rely on the support of PP-DB in contrast to its coalition partners and its anti-European partners in opposition. Of course, PP-DB would have far more serious leverage in favor of early accession to the euro, if they were in power together with GERB – then they would even have the ultimate option to leave the cabinet at its very start, if GERB backs away from the eurozone. Now the PP-DB cannot even try to overthrow the government without compromising themselves - not only because they will have to seek support from the Europhobic formations "Vazrazhdane" or "Mech", or from the impossible for them DPS-New Beginning, but also because in this parliament there is no prospect of an alternative governing majority that would once again take an accelerated path forward towards the euro.
Nevertheless, GERB has no interest in losing its Euro-Atlantic partnership with the PP-DB, because if it fails with the eurozone, it will turn out to be an untrue pro-European formation. This will not only doom Boyko Borisov's party to ever greater dependence on Eurosceptic formations, but will also expand the field of the PP-DB, which can position itself as the only sure pro-Europeans.