Bulgaria faces significant challenges on its path to euro adoption, with political instability emerging as a critical hurdle rather than inflation. While inflation rates have shown signs of cooling—decreasing by 1% from August to September and 1.2% year-on-year—Bulgaria still has not met all the Maastricht criteria necessary for eurozone entry. The acting Prime Minister, Dimitar Glavchev, remains optimistic, suggesting that Bulgaria could meet the price stability criterion by the end of 2024, potentially allowing for extraordinary convergence reports.

However, following the October 27 elections, the outlook for a stable government appears bleak. Without a functioning cabinet, Bulgaria cannot proceed with euro adoption, even if it maintains low inflation and meets other fiscal criteria. For Deutsche Welle, Rumen Galabinov, a financier, emphasized the need for a pro-European government to further efforts toward Schengen accession. International rating agency Fitch also noted that while Bulgaria could meet the price stability criterion by early 2025 and aim for euro adoption in 2026, political instability may hinder this timeline.

Amid these discussions, the political party "Revival" has shifted its approach to the euro, downplaying its previous opposition and instead positioning itself as a party advocating for alternative economic and political alliances, such as BRICS. This new strategy allows "Revival" to attract a broader voter base while still cautioning that Bulgaria is unprepared for the euro, citing potential price shocks particularly felt through rising food costs.

The political discourse is not limited to "Revival." The party "There Is Such a People" (TISP) also expresses doubts about Bulgaria's readiness for the Eurozone, with notable figures from the Bulgarian Socialist Party (BSP) echoing similar sentiments, notes DW.

Despite ongoing political debates, Bulgaria is making strides in its technical preparations for the euro. However, a significant issue remains: the prevalence of cash transactions, which indicate a shadow economy and corruption. Data from the Bulgarian National Bank (BNB) show that in 2023 alone, there were 4.7 million cash withdrawals totaling 25.7 billion leva, alongside 10.7 million deposits worth 38.1 billion leva.

Experts, like Ruslan Stefanov from the Center for the Study of Democracy (CSD), caution that the high volume of cash transactions signals deeper issues related to corruption and a lack of financial transparency. He underscores that while meeting the formal criteria is essential, gaining trust from international partners is equally critical.

Stefanov further highlights concerns regarding the BNB’s independence, particularly following the recent appointment of Lubomir Karimanski to its board. The process lacked transparency and public motivation, raising red flags about the central bank's governance.

In summary, while inflation may appear manageable, the overarching issues of political instability, high cash transaction volumes, and a lack of trust could prove to be more significant obstacles on Bulgaria's journey to euro adoption.