European Central Bank Executive Board member Philip R. Lane, speaking in Sofia, welcomed Bulgaria’s entry into the euro area and reported a smoother-than-expected euro cash changeover with no disruptions to payment systems. He said the withdrawal of lev cash is proceeding well and that, by the end of the dual lev/euro circulation period on 31 January 2026, euro banknotes and coins accounted for 70% of total cash in circulation, while preliminary analysis suggests only a minor impact on the overall price level. Lane also noted that Bulgaria is now participating in Eurosystem decision-making, with the Bulgarian National Bank contributing through the Governing Council and Eurosystem committees. The speech framed the common currency as a coordination mechanism for responding to shared structural and geopolitical risks, and highlighted the importance of scale for currency use in trade and finance, the depth and liquidity of euro-denominated markets, and efficient payment and market infrastructure, including the digital euro and the Pontes and Appia projects to modernise central bank money at retail and wholesale levels. For Bulgaria, Lane pointed to issues raised in the ECB’s 2025 Convergence Report, including the need to improve institutional quality and governance and strengthen reform momentum, and warned that convergence could entail higher inflation and wage growth and stronger credit and house price dynamics than the euro area average, requiring close monitoring and precautionary measures; he welcomed the Bulgarian National Bank’s borrower-based mortgage restrictions and countercyclical capital buffer. Fiscal priorities highlighted included increasing and improving capital spending via stronger public investment management, boosting tax collection by tackling the informal economy, strengthening state-owned enterprise governance and profitability, and improving pension system sustainability.
European Central Bank 2026-02-12
European Central Bank’s Lane says Bulgaria’s euro cash changeover was smooth and urges governance reforms and macroprudential vigilance
European Central Bank Executive Board member Philip R. Lane, speaking in Sofia, praised Bulgaria's smooth transition to the euro, noting minimal impact on prices and Bulgaria's new role in Eurosystem decision-making. He emphasized the euro's role in addressing structural and geopolitical risks and highlighted Bulgaria's need for institutional improvements, cautioning about potential inflation and credit dynamics, while endorsing fiscal reforms.