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Bulgaria Enters Euro Zone, Bids Farewell to the Lev

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Bulgaria officially joined the euro zone on Thursday, marking a historic shift as the euro replaced the lev as the country’s currency from midnight. Celebrations took place across the capital Sofia, with euro coin projections lighting up the central bank’s facade and fireworks welcoming the milestone. Bulgaria becomes the 21st member of the euro area, increasing the number of Europeans using the common currency to over 350 million.

The move grants Bulgaria a seat on the European Central Bank’s Governing Council, allowing it to participate directly in euro zone monetary policy decisions. Successive governments have pursued euro adoption since Bulgaria joined the European Union in 2007. While public opinion remains divided, businesses have largely backed the transition, citing easier trade, travel and financial stability within the EU.

Many citizens expressed cautious optimism, saying the currency change would simplify travel and everyday transactions. However, concerns remain among some Bulgarians about potential price rises and broader political instability, following the government’s recent resignation amid protests over proposed tax hikes. Despite these worries, officials say euro adoption represents a major step toward deeper European integration.

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EU Struggles to Shift Savers From Cash as Investment Reforms Lag

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The European Union continues to face an uphill battle in encouraging households to move money from cash into investments, even after a decade of efforts toward a capital markets union. Despite more than 60 legislative proposals, progress has been slowed by national interests, political shifts and technical hurdles. As a result, Europeans continue to hoard cash, with savings in bank deposits reaching 12.1 trillion euros—about 30% of household wealth—far higher than in the United States. In Germany, the figure is even more striking, with over 40% of financial assets held in cash or deposits.

Alarmed by the continued fragmentation of capital markets, several EU countries—led by Spain—have launched a pilot project to introduce a “Finance Europe” label that would help savers identify investment products that support EU companies. Meanwhile, policymakers and think tanks are pushing to scale Italy’s successful Savings Investment Plan (PIR), which directs household savings toward local firms, into a broader EU-wide scheme. Such initiatives are part of the bloc’s broader Savings and Investments Union (SIU), set to be unveiled this week, which includes proposals to empower the European Securities and Markets Authority and ease cross-border barriers for asset managers.

However, cultural and trust-related obstacles remain significant. Many EU households remain risk-averse and skeptical of investment products, often citing low returns, high fees and lack of reliable financial guidance. Former ECB chief Mario Draghi noted that EU household wealth has grown much slower than in the U.S., partly due to low interest rates on deposits that fail to keep pace with inflation. As regulators push for greater integration, experts warn the SIU will fall short unless it addresses public distrust and simplifies investment pathways for ordinary savers.

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