The draft Law on the Introduction of the Euro in the Republic of Bulgaria (LIERB) has been developed by an inter-ministerial working group at the Ministry of Finance, which includes representatives of the Bulgarian National Bank (BNB), all ministries and interested institutions and organizations, representatives of the business and academic community. The draft law has been approved by the European Commission and is to be coordinated with the European Central Bank.
The IERB Bill will regulate the principle of consumer protection, the principle of information, the principle of efficiency and economy, the principle of transparency and the principle of continuity and automatic conversion of amounts from levs to euros.
It will also regulate the means of rounding up after conversion the values of goods and services, bank accounts, debt securities, government securities, government and government-guaranteed loans, securities, wages, pensions, social allowances and benefits, etc.
At the heart of the law is the rule for automatic conversion of amounts from levs into euros, as well as the definition of key rules for the changeover - conversion and rounding. Information and transparency on this process is foreseen.
Following the practice of other European countries that have adopted the euro, no specific date for the introduction of the euro or the official exchange rate of the lev to the euro is set. The date and rate will be determined by the Council of the EU by unanimous decision of the Member States whose currency is the euro and the Republic of Bulgaria.
The commitment of the Bulgarian authorities includes that our country will join the Eurozone at the current fixed rate, as confirmed in the National Plan for the introduction of the euro in the Republic of Bulgaria.
From the day of the introduction of the euro, account holders will only be able to withdraw euros from their accounts, whether the withdrawal is made via an ATM/POS device or at the office of a bank, payment institution, etc. From the date of introduction of the euro, it is envisaged that salaries, benefits, cash and social allowances and pensions will be paid in euro.
A period of adjustment and adaptation, the so-called "dual circulation period of the lev and the euro", is foreseen, during which citizens can adapt to payments in the new currency and which will allow a smooth procedure for the exchange of banknotes and coins from levs into euros. This period will last one month from the date of the introduction of the euro. During this time, both the lev and the euro will be legal means of payment. After this period, the lev will cease to be legal payment means.
The draft law stipulates that the Bulgarian National Bank shall, from the day of the introduction of the euro, exchange banknotes and coins from levs into euro free of charge, in unlimited quantities and without time limit, at the official exchange rate. According to the draft, during the first 6 months after the introduction of the euro, banknotes and coins can be exchanged free of charge from levs into euro in credit institutions (banks) and in some branches of the Bulgarian Post.
It is foreseen that the new interest rate on variable-rate credit agreements may not be higher than the interest rate before the euro changeover date. In the case of a fixed-rate credit agreement on the euro adoption date, the interest rate will remain as agreed before the euro adoption date.
The prices of goods and services will be quoted in both levs and euros from the first month following the Council Decision on the adoption of the euro until 12 months after the date of introduction of the euro in the Republic of Bulgaria.
The draft law proposes that both prices be displayed clearly, legibly, unambiguously and easily understandable, in the same font size, in a way that does not mislead consumers. They must be placed together and will be accompanied by a distinctive sign or abbreviation allowing their easy identification. The final amount paid by the consumer will also have to be reflected in both currencies on the fiscal/system voucher issued.
In connection with the obligations of the business on the introduction of the euro, on 21.03.2024, at a meeting of the working group "Non-financial sector", which was also attended by representatives of employers' organizations and of large businesses, members of these organizations, the Ministry of Economy presented draft Guidelines for the implementation of Chapter Four, Section II "Accounting documents" of the draft law on the introduction of the euro in the Republic of Bulgaria (on accounting).
The Guidelines have been prepared to facilitate all entities carrying out business activities within the meaning of Article 2 of the Accounting Act, which are obliged to keep current accounting records and prepare annual financial reports, to obtain detailed explanations of the rules and procedures for the introduction of the euro as the currency in the Republic of Bulgaria.
Anyone can send their suggestions, comments and recommendations regarding the Draft Law on the introduction of the euro in the Republic of Bulgaria to the email address lawyers@bcci.bg . The deadline for receiving comments is 24 April 2024.