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Bulgaria’s Eurozone games

The circumstances surrounding a proposed initiation of a referendum on Bulgaria’s entry date to the Eurozone are symptomatic of the country’s rule of law decay.

May 20, 2025 - Radosveta Vassileva - Articles and Commentary

Changing of the guard of honor near the Presidential Palace of the Republic of Bulgaria in Sofia. Photo: Shutterstock

On May 9, 2025, Bulgaria’s President Rumen Radev proposed the initiation of a referendum on the date of Bulgaria’s joining the Eurozone. His initiative caused a political storm and public hysteria, but, most of all, shone a light on the extent of capture of Bulgarian institutions, including parliament.

Polls carried out earlier this year by Myara showed that 51.7 per cent of Bulgarians oppose Bulgaria’s Eurozone entry in principle while 39 per cent support it in principle. Meanwhile, when reminded that joining the euro area is one of the country’s obligations under the EU Treaties and in view of current efforts to adopt the euro on January 1st, 2026, 41.4 per cent of respondents asserted that Bulgaria should “never” join the Eurozone while 30.8 per cent stated that it should join at a later stage.

As Bulgaria is a country in which appearances can be deceiving and as populist rhetoric is common even among non-nationalist parties, to understand what lurks behind the Eurozone debate and its implications, one needs to take a step back.

The Eurozone as a smokescreen propelling autocracy

A series of corruption scandals as well as a raid against Radev’s Presidency on July 9th, 2020 which was perceived as an attempted coup, ignited mass anticorruption protests against Borissov’s third government that lasted more than one-hundred days. Coincidentally, on the following day, July 10th, 2020, the European Commission made the surprising announcement that Bulgaria (and Croatia) had been included in the Exchange Rate Mechanism II (ERM II), also known as Eurozone’s ‘waiting room’.

Whether Bulgaria’s acceptance into the ERM II was the result of an objective evaluation or last-minute behind-the-scenes political deals facilitated by the European People’s Party (EPP) is subject to debate. Considering the Commission’s own deplorable record of dual standards in monitoring Bulgaria’s compliance with EU law, Borissov’s warm ties to the EPP, and Manfred Weber’s public statement that he admired Borissov’s fight against corruption dated July 10th, 2020, one is entitled to serious doubts. What was visible, however, was that Borissov quickly blamed the protesting citizens of not being “joyful” about Bulgaria’s success and jeopardizing the country’s bright future that only he could ensure.

An election spiral exposing Borissov’s dependencies behind-the-scenes

Since the dramatic events from 2020, Bulgaria has been caught in an election spiral. This pushed Borissov’s GERB party to make some of its unhealthy dependencies public. Unsurprisingly, the current ‘Zhelyazkov’ government and parliament have negative ratings – 27 per cent of citizens have confidence in the government while 46 percent do not have confidence in it; 13 per cent of citizens trust parliament while 64 per cent do not. Two main factors shed light on this crisis of trust. The latest parliamentary election in October 2024 was marked by such flagrant irregularities that even the Constitutional Court, which has a record of pro-Borissov’s bias, declared it, in part, unlawful. Even more importantly, President Radev is among the few politicians who have called out the true underlying problem of the government formally led by Rossen Zhelyazkov: “Instead of a Zhelyazkov government, we have a government of Borissov and Peevski… We have visible results, such as the capture of institutions and resources”. It is an open secret that Borissov and Peevski, who was sanctioned for corruption by the US and UK governments, respectively, in 2021 and 2023, are partners behind-the-scenes. As visible by the current voting patterns, the survival of the ‘Zhelyazkov’ government is ensured by Peevski’s ‘New Beginning’ party, which branched off the DPS party, once ALDE and Renew threatened to terminate DPS’s membership if Peevski remained at the forefront.

In view of the constant controversies surrounding Zhelyazkov’s government, joining the Euro area has become the straw to which it clutches like a drowning man to justify its existence. In February this year, Zhelyazkov’s government asked for an extraordinary convergence report for Bulgaria in an attempt to ensure Eurozone entry on January 1st, 2026. Normally such reports are published every two years – Bulgaria’s latest report was released in the summer of 2024. This inevitably begs the question – why the sudden rush?

The sudden rush and the legitimate concerns against it

Bulgaria is a country in which public institutions compete at spreading falsehoods, which on its own leads to concerns about Bulgaria’s preparedness to join the Euro area. As Eurozone membership involves the fulfillment of the Maastricht criteria, which are macroeconomic in nature, worries are only exacerbated by Bulgaria’s record of tweaking data.

First, Bulgaria has been historically plagued by scandals concerning manipulations of the GDP. Moreover, already in the first Borissov government, one of the strategies to tweak the budget deficit involved accounting expenses not on an accrual basis, which is considered the more reliable bookkeeping method, but on a cash basis – if the state does not pay in the year in which a payment is due, this is not considered an expense in the eyes of the state. Recently, even more problematic accounting tricks have been put to light. In a rush, in March 2025, parliament adopted a new budget. Vigilant observers were quick to note, however, that a new debt of more than 7 billion leva was concealed as increasing the capital of Bulgarian state-owned companies. In parallel, the Minister of Finance Temenuzka Petkova announced that all profit by state-owned companies will be “collected” in favour of the state. This leads to educated guesses that Bulgaria’s true deficit is above 6 per cent, while pursuant to the Maastricht criteria, the budget deficit should be less than 3 per cent.

Until recently, even based on tweaked statistics, it was believed that Bulgaria’s main impediment to joining the Eurozone was inflation. Data by the World Bank shows that inflation amounted to 15.3 per cent in 2022, 9.4 per cent – in 2023, and – 2.4 per cent in 2024. While it is unclear what possible strategy Bulgaria could have relied on to reduce inflation, ordinary citizens indeed wonder how their bills continue to rise while institutions argue that inflation has been tamed.

Against this background and in view of the fact that the value of the Bulgarian lev is artificially appreciated because of the specifics of the country’s currency board, it is not surprising that many ordinary citizens and macroeconomists alike worry that joining the Eurozone in 2016 is premature and may result in a financial crisis. The memory of the recent crisis in neighbouring Greece, which, among other factors, was triggered by the discovery that Greece joined the Eurozone with tweaked statistics and hidden debt, is quite fresh and fuels even more skepticism.

The ocean of propaganda and the lack of meaningful debate

Radev’s initiative not only shed further light on the Borissov-Peevski alliance, but also on its hidden supporters. Regrettably, already the Denkov government (2023-2024) galvanized the unhealthy synergies between the aforementioned duo and parties that emerged from the anticorruption protests. In the eyes of many, the participation of the PPDB coalition in the Denkov government constituted a betrayal of the protests since PPDB promised to challenge Borissov and Peevski and not make dirty deals on multiple occasions. Unsurprisingly, because of their unprincipled actions, this coalition lost public support as it could not be seen as a true opposition to the toxic status quo. At the April 2023 election, PPDB received 621, 069 votes while at the October 2024 election, after the betrayal of their voters, they only received 346, 063 votes.

In this light, it is quite revealing that prominent PPDB members did not engage in a substantive debate about Radev’s proposed referendum, but relied on simplistic propaganda, labeling, and overt speculations instead. Ivaylo Mirchev, co-leader of ‘Yes, Bulgaria’, argued that Radev was attempting to please the Kremlin. Nevertheless, he failed to explain what Putin gains from Bulgaria’s delayed entry to the Eurozone and he omitted to mention that Borissov and Peevski, who support Bulgaria’s immediate entry, have a long record of Russian ties. The PP party, in a public position, claimed that Radev was attempting to bring Bulgaria back to the “dark past” and undermine the “security” of the EU, without bothering to clarify how a referendum in line with public concerns can result in such an apocalypse. Its leader Kiril Petkov went as far as saying that Radev’s proposal violated the postulates of national hero Vassil Levski who wanted to see Bulgaria equal to other European states. Levski was fighting for Bulgaria’s independence from the Ottoman Empire in the 19th century – in Levski’s rhetoric equality certainly meant the sovereignty which other European peoples had achieved.

The simplistic means to deviate attention from the core concerns underpinning Radev’s referendum raise even more eyebrows considering that under the Constitution and pertinent laws, Radev’s proposal is not binding – it must be examined by parliament on its merits first.

The head of parliament puts herself above the Constitution and parliament?

While populism even among parties that claim to be anti-populist is not the exception on the Bulgarian political stage, the seemingly unlawful actions by Natalia Kiselova, current head of parliament, incarnate a more sinister plot twist. In a press release of May 13th, 2025, parliament announced that Kiselova refused that parliament examine Radev’s proposal, arguing his initiative was anti-constitutional. It transpires that in her letter Kiselova has referred to a decision by the Constitutional Court which considered a referendum on a different question pertaining to the Euro.

Nevertheless, under the Constitution, the Constitutional Court has the final, authoritative say on constitutional compliance. The decision referenced by Kiselova was accompanied by a dissenting opinion, which shows that there is room for debate even on the question the court allegedly resolved. Furthermore, it is not for Kiselova, but for the court to draw any parallels and reason by analogy. More importantly, neither the Constitution, nor pertinent legislation, nor the rules of parliament bestow such powers to reject proposals for referenda upon the head of parliament, which only shows that Kiselova’s neglect of the law was politically motivated. It is for parliament to approve or reject the organization of such referendum – such prerogative cannot lie in a single MP who has the status of first among equals.

Normally, Kiselova should have assigned Radev’s proposal for examination by the competent parliamentary committees. Considering that the governing majority is committed to quick Eurozone entry, it is highly unlikely that the referendum would have been given the green light, either. It seems that Kiselova’s actions are a smokescreen behind which the majority can hide their fear of discussion. Yet, substantive debate regarding key issues is a mechanism enforcing trust in a democracy. So is dialogue between citizens and their representatives.

The Eurozone games: too early for the aftermath

Considering the status quo in parliament, it is clear that Radev knew that his initiative was doomed to begin with. He seems to have pursued other goals – exposing the various unhealthy dependencies in parliament and showing to what extent MPs are disinterested in citizens’ concerns.

There are several lessons to be taken. First, since Radev’s second term as president is about to expire and he cannot run for office again, he may benefit from the wave of discontent and establish his own party, in attempt to move waters in the toxic swamp that Bulgaria’s political landscape has transformed in. Yet, fortune favours the brave and Radev is not known for excessively bold political moves. This leaves little hope for disillusioned citizens.

Second, Bulgaria’s joining the Eurozone seems to be an entirely political decision at this stage – for years, EU institutions have turned a blind eye to irregularities, falsifications, and overall rule of law decay. Whether the ECB will look the other way like the rest of EU institutions, remains to be seen in its convergence report, but it will be illustrative of how much it cares about its own legitimacy. After all, should problems arise in the future, it will be the one primarily stuck with a hot potato.

Dr. Radosveta Vassileva is a Bulgarian legal scholar whose research interests encompass EU law and comparative public and private law. She maintains a personal blog dedicated to the rule of law in Bulgaria. She is currently Adjunct Senior Research Fellow at University College Dublin.


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