Bulgaria's eurozone accession problems mount

Despite receiving a commendation from eurozone leaders for its progress back in March, Bulgaria's political stalemate has further delayed its eurozone entry — now only expected in 2026 due to ongoing instability and inability of Bulgaria to meet the required criteria.

While the entry was originally targeted in January 2024, Bulgaria's high inflation led to a postponement to 2025 to allow time for economic stabilisation. However, the political crisis has intensified, as the country heads toward its seventh election in three years, following the failure of three different political parties, including the populist There Is Such a People party to form a stable government.

The political crisis is compounded by other significant challenges. Bulgaria, currently the European Union's poorest nation based on GDP per capita, remains one of the lowest-ranked EU nations in the Corruption Perceptions Index (CPI), reflecting persistent corruption issues.

Additionally, Bulgaria struggles with institutional weaknesses and low innovation, as evidenced by its performance on the Global Competitiveness Index (GCI).

Senegal, Ghana, Jordan...Bulgaria

Moreover, low scores on the Rule of Law Index highlights ongoing concerns about judicial independence and law enforcement effectiveness. In terms of the rule of law, Bulgaria ranks similarly to countries like Senegal, Ghana, and Jordan. These challenges highlight Bulgaria's significant and ongoing difficulties in fully aligning with EU standards.

Given that former prime minister Boyko Borissov and sanctioned media mogul Delyan Peevski remain influential figures, it's unsurprising that Bulgaria finds itself in this situation, raising questions about the country's democratic development.

Despite deep frustration and anger over corruption, which sparked massive anti-mafia protests in 2020, reformers in Bulgaria face significant challenges. Both the GERB (the Borissov party dominating Bulgarian political landscape for the last 15 years) and the DPS (the Turkish minority party in which Peevski has recently tried to extend its influence) parties maintain strong support through clientelism networks, regional strongholds, and the influence of local officials, where many feel their livelihoods are tied to party loyalty. This entrenched system complicates efforts to bring meaningful change, as these parties can reliably mobilise their voting bases.

A traditional counter-power, the Bulgarian press is largely controlled by Peevski, an individual listed under the Magnitsky Act due to his controversial role in Bulgarian politics, including running bribery schemes and exerting control over key Bulgarian institutions and sectors. The UK's sanctions against him under the Global Anti-Corruption Regulations 2021 echo these concerns. 

The roles held by these individual and organisations and the sanctions adopted against them, and in turn Bulgaria, highlight the urgent need for transparency and accountability within the country.

Moreover, they emphasise the international community's commitment to combating corruption, reinforcing the importance of reforming Bulgaria's political and economic systems to meet eurozone standards.

These ongoing issues have significantly delayed the essential reforms needed for Bulgaria's eurozone integration, pushing the potential entry date to 2026 at the earliest.

Experts from Scope Ratings have pointed out that the primary reasons for this delay are the country's persistent high inflation, which despite efforts to reduce it remains above the top three performing EU countries, and ongoing political instability, resulting from the confrontation between forces pushing for modernity and higher standards and the old guard incarnated by Borrissov and Peevski fighting for the corrupt status quo. 

Russian disinfo

Russian disinformation has also played a role in Bulgaria's delayed eurozone entry.

Various analysts have noted that misinformation campaigns, particularly those funded by Russian interests, have been used to create doubt and scepticism about the benefits of adopting the euro.

These campaigns have negatively influenced public opinion, making it more challenging for the government to secure the necessary support for the transition to the eurozone, further complicating Bulgaria's path toward meeting the criteria for membership.

The disinformation campaigns typically focus on exaggerating the potential risks of adopting the euro, such as fears of price increases or loss of economic sovereignty, which can delay political and public support needed for the transition.

As Bulgaria faces yet another snap election, the ongoing uncertainty continues to cast doubt on the nation's future within the European monetary union. The deadlock not only threatens Bulgaria's Eurozone timeline but also its broader economic goals.

Without decisive action, the window for adopting the euro in the planned timeframe could close, potentially pushing the country’s entry back by several years. This situation reflects a broader challenge facing Bulgaria — a nation striving to align with EU standards while grappling with deep-seated political divisions that continue to impede progress.