The Ministry of Finance in Bulgaria has revealed that the process to facilitate the exchange of levs with euros in the country will come with a hefty price tag, estimated to be at least BGN 500 million. This disclosure accompanies the draft Law on the introduction of the euro, which was published by the Ministry on Tuesday.

According to the report accompanying the draft law, the conversion process entails substantial one-time costs, including the withdrawal of leva banknotes and coins from circulation and the distribution of the euro by various financial entities. The Bulgarian National Bank (BNB), commercial banks, and non-bank payment service providers will shoulder significant expenses for converting accounts from BGN to EUR, as well as adapting their information and accounting systems.

Additionally, the inclusion of "Bulgarian Posts" in the exchange process at post offices throughout the country is estimated to incur nearly BGN 30 million in direct and indirect costs, to be covered by the state budget.

While individuals will not face charges for converting their bank accounts or exchanging BGN in cash during the initial six months after the euro's introduction, various entities, including state and municipal authorities, payment service providers, and businesses, will incur additional expenses. These costs, outlined in the comprehensive 200-page assessment report, are deemed significant due to the complexity of the conversion process.

The report underscores that the full impact of implementing the Law on the introduction of the euro cannot be accurately estimated, given the scale of the undertaking. Costs associated with adapting accounting systems, fiscal devices, and operating with two currencies simultaneously remain challenging to quantify.

Furthermore, the Ministry of Finance emphasizes that all entities, both public and private, are responsible for covering their costs related to the euro adoption process. The state budget will not compensate costs incurred by the private sector.

A survey conducted by the Ministry of Economy and Industry among small and medium-sized enterprises reveals varying expectations regarding the financial implications of dual pricing. While 37% of respondents anticipate costs between BGN 500-2,500, a significant portion expects higher expenses. Notably, 39% of businesses do not anticipate any costs related to dual pricing.

However, all businesses will be required to finance the conversion of their cash registers to accommodate euros. With 28% of surveyed enterprises indicating costs exceeding BGN 2,500, the financial burden is expected to be substantial for most businesses.

econ.bg