Published: 2026-06-13
A recurring promise: with the euro, Bulgaria "frees up" 20–40 billion leva of reserves it can finally spend. We trace the claim to source — how big the BNB reserve actually is (≈€42bn), what happened to it on 1 January 2026 (a ≈€1.48bn transfer to the ECB in exchange for a non-redeemable claim — an accounting swap, not a release), and why EU law (Art 123 TFEU) and basic accounting mean neither the state nor anyone else gets cash to spend.
For years the same promise has come around, only the wrapping changes: by joining the euro area, Bulgaria "frees up" tens of billions of reserves it can finally spend — on pensions, on defense, on motorways, on whatever is needed. The figure swings between 20 and 40 billion leva depending on who is talking. It sounds logical: if the lev no longer needs foreign-currency backing, why should that reserve stay locked away?
The short answer is: no, nothing is freed up to spend. The BNB reserve is not the state's savings account, and the euro does not turn it into one. What happened on 1 January 2026 is almost entirely an accounting swap of one asset for another — not a release of cash. Below is why, with verified figures and sources anyone can open.
At 31 December 2024 the balance sheet of the BNB's Issue Department — the accounting expression of the currency board — totaled BGN 82.25bn, or about €42.06bn, on both sides.[^ar2024] On the asset side sit the currency and gold that back the lev; on the liability side, the money in circulation and the accounts the board owes.
| Assets | €bn | Liabilities (monetary) | €bn |
|---|---|---|---|
| Cash and foreign-currency deposits | 21.39 | Notes and coins in circulation | 15.89 |
| Monetary gold | 3.30 | Liabilities to banks | 13.84 |
| Investments in securities | 17.37 | Liabilities to government | 4.65 |
| Liabilities to other depositors | 0.77 | ||
| Banking Department deposit | 6.90 | ||
| Total | 42.06 | Total | 42.06 |
The same sum shows up in the official-reserve-assets statistics: €42,057.9m at end-2024 — foreign-currency reserves €36,763.3m, gold €3,296.0m (1.3m fine troy ounces at market price), special drawing rights €1,875.4m and an IMF reserve position €123.2m.[^ar2024] By end-June 2025 gross international reserves had eased to €40.75bn.[^h12025]
Here is the first thing the myth skips over. The reserve covers the monetary base with a surplus — cover is above 100%. But that surplus is not "spare cash": by the accounting identity it is exactly the "Banking Department deposit" line on the balance sheet — BGN 13.49bn / €6.90bn at end-2024. That is the BNB's own liability (the net value the bank holds over its Article-28 monetary liabilities — about BGN 68.8bn), not an account parliament can open and spend. Assets = liabilities; the surplus is the bank's, not the treasury's.
The currency board ran from 1 July 1997 and split the BNB structurally into three departments.[^lawbnb] The Issue Department held all foreign-currency assets and was required to maintain full foreign-exchange cover of the entire monetary base — that is the point of Article 20 of the Law on the BNB. The Banking Department held the reserve surplus as a crisis "safety valve". The third was Banking Supervision.
The heart of the regime was Article 28 of the Law on the BNB: the aggregate amount of BNB monetary liabilities may not exceed the lev equivalent of gross foreign-exchange reserves, valued at the fixed rate (Article 29 — originally to the Deutschemark, then 1 EUR = 1.95583 BGN). That is why the reserve was, by construction, ≥100% of the monetary base, and why the BNB published the Issue Department balance sheet every week as the operational expression of the rule.
Worth noting for anyone writing on this today: that description is in the past tense. The Article-28 cover rule applied through 31 December 2025. The euro amendments to the Law on the BNB (passed in 2023) repeal it from 1 January 2026 — Article 28 now governs euro banknotes, and reserves move under new provisions plus the Article 30 mechanism of the ESCB Statute. The currency board has ended; the euro replaced it with membership of the Eurosystem.
On 1 January 2026 the BNB became part of the Eurosystem (Bulgaria is the 21st euro-area member), and its Governor gained a seat on the ECB Governing Council.[^ecbpr] With that came two distinct, legally fixed transfers — both small, both keyed to Bulgaria's share in the capital, not to the size of the reserve:
First, the ECB capital subscription (Art 28–29 ESCB Statute). The BNB's capital key is 0.9783% = €105.9m. On joining, the BNB paid up the remaining 96.25% of its subscribed capital — €101.9m (it had previously paid just under €4m as a non-euro-area central bank).[^ecbblog]
Second, the transfer of foreign reserve assets to the ECB (Art 30 ESCB Statute). The BNB transferred to the ECB reserve assets of exactly €1,482,514,654.83 — about €1.48bn: US-dollar cash worth €1.26bn plus gold worth €0.22bn.[^dec2026115] That is about 3.6% of the entire reserve. In exchange, the ECB credited the BNB with a euro-denominated claim of €485,296,405.74 (≈€485.3m) — non-redeemable and interest-bearing (at 85% of the reference rate).[^dec2026115]
In other words: even the transferred slice does not vanish and does not become spendable — it is replaced by a claim on the ECB. The remaining ~96% of the reserve stays on the BNB's own balance sheet as Eurosystem reserves, which the bank continues to own and manage. The size of the transfer is a statutory formula on the capital share, not a function of how large Bulgaria's reserve is. So the change is, in substance, an accounting one — one asset (currency/gold) is swapped for another (a claim on the ECB).
Two independent reasons meet here — one accounting, one legal — and either alone is enough.
The accounting one. A balance sheet balances: assets = liabilities. The "surplus" the politicians point to is, by definition, a BNB liability (the Banking Department deposit / the net value of the Issue Department), not state money. The state can dispose without limit only of its own receivables from the BNB — the balance on the government accounts at the bank, which is already part of the budget anyway. The reserve is not among them.
The legal one. EU law independently bars the reserve from becoming a fiscal resource. Article 123 TFEU prohibits monetary financing — the central bank cannot fund the government; the BNB confirms this prohibition binds it regardless of euro status. Article 130 TFEU guarantees central-bank independence — the National Assembly has no power to order the use of the foreign reserves.[^art123][^bnbqa]
The only lawful channel by which any BNB money reaches the budget at all is the distribution of the bank's profit under the Law on the BNB — that is, a share of the annual financial result, never the principal of the reserve. That is a real but modest flow, and it is not a "release" of anything.
The claims that the euro would "free up" 20–40bn leva to spend were made publicly by politicians (among them Kiril Petkov[^petkov] and Kostadin Kostadinov[^kostadinov]) and explicitly rebutted by the BNB: all financial and other assets on the BNB's balance sheet, outside the Eurosystem's monetary assets, are its own, and the government cannot dispose of them; the National Assembly "has no power to mandate the use of the foreign reserves".[^mediapool][^bnbqa] The Institute for Market Economics reaches the same conclusion: "purely technically there is nowhere for changes to come from, still less a 'release' of reserves… The change in the BNB's assets will be purely an accounting one."[^ime]
In short: the sources — the BNB, the IME, EU law — are unanimous. The myth collapses.
For honesty: one thing does genuinely change beyond pure accounting. With the end of the currency board, the BNB can sharply cut commercial banks' minimum reserve requirements (from around 12% toward around 1%), freeing roughly 15–16bn leva of liquidity.[^mrr] But that money belongs to the banks and is deployed at their discretion (into lending, for example) — it is not a fiscal resource and the state cannot spend it. So this effect does not contradict the core answer; it is simply a different pocket.
The takeaway is simple and matters for any budget debate: the deficit cannot be covered by "spending the reserve", because there is nothing to spend. A budget hole is closed only with revenue and spending — higher taxes, a broader base, or cut outlays. That is precisely why, in the budget simulator, the deficit moves only through the tax and spending levers: a "reserve to spend" is simply absent from the equation, because in legal and accounting terms no such thing exists.
The euro brings Bulgaria a great deal — lower currency risk, cheaper financing, a seat at the monetary-policy table. But a "piggy bank with tens of billions to hand out" is not among them. Anyone who promises otherwise has either not read the Issue Department balance sheet, or is counting on you not to.
[^ar2024]: BNB — Annual Report 2024: Issue Department balance sheet (section 1.1) and Table 5.14.1 "Official Reserve Assets". The three assets (currency, gold, securities) and the five liability lines (four monetary plus the Banking Department deposit BGN 13,488,631 thousand) sum exactly to BGN 82,254,641 thousand ÷ 1.95583 = €42.06bn. bnb.bg (PDF).
[^idbalance]: BNB — weekly and monthly Issue Department balance sheet (statistics). bnb.bg.
[^h12025]: BNB — first-half 2025 report: gross international reserves were €40.75bn at end-June 2025 (down €1.30bn / 3.1% on end-2024), and "consist of the assets recorded on the Issue Department's balance sheet". Reproduced by BTA.
[^lawbnb]: Law on the BNB — Art 19 (three departments), Art 20(1) (Issue Department function: maintain full foreign-exchange cover of monetary liabilities), Art 28(1) (monetary liabilities may not exceed the lev equivalent of gross foreign-exchange reserves) and Art 29 (fixed rate). The Article-28 cover text governed the board through 31 December 2025; the euro amendments to the law (2023) repeal it from 1 January 2026. lex.bg.
[^ecbpr]: ECB — press release of 1 January 2026: the BNB "becomes part of the Eurosystem", the Governor "gains a seat on the Governing Council", bringing euro-area members to 21. ecb.europa.eu.
[^ecbblog]: ECB — blog, 6 February 2026: BNB capital key 0.9783% = €105.9m; remaining 96.25% paid = €101.9m; ~€4m paid previously. ecb.europa.eu.
[^dec2026115]: Decision (EU) 2026/115 of the ECB of 31 December 2025 (ECB/2025/44): Art 3 — transferred reserve assets: US-dollar cash €1,260,137,456.61 + gold €222,377,198.22 = €1,482,514,654.83; Art 4 — claim on the ECB €485,296,405.74, non-redeemable (Art 4(4)), remunerated at 85% of the reference rate (Art 4(2)). EUR-Lex.
[^art123]: Treaty on the Functioning of the European Union — Art 123 (prohibition on monetary financing of governments by the central bank) and Art 130 (independence of central banks from instructions by governments and institutions). EUR-Lex.
[^bnbqa]: BNB — questions and answers on euro-area accession: the BNB's assets outside the Eurosystem's monetary assets are its own and the government cannot dispose of them; Art 123 TFEU binds the BNB regardless of the euro. bnb.bg.
[^ime]: Institute for Market Economics (IME) — "Joining the euro area will not free up Bulgaria's reserves": the transfer of part of the foreign reserves to the ECB creates a new receivable on the bank's asset side, and "the change in the BNB's assets will be purely an accounting one". ime.bg.
[^mediapool]: Mediapool, 17 May 2025 — "The BNB's BGN 80bn reserve will not be spendable after euro-area accession": BNB officials rebut politicians' claims that 20–40bn leva would become available to spend. mediapool.bg. See also BNR and economic.bg.
[^mrr]: investor.bg — banks' minimum reserve requirements fall by about 15bn leva after euro-area accession. This is banks' liquidity, not the state's. investor.bg.
[^petkov]: Kiril Petkov (then co-leader of ПП–ДБ): "20 billion is freed up for us, which can either remain as BNB capital or be used to repay the state's external loan" (Bulgarian: „Освобождават ни се 20 милиарда…"). Quoted in Mediapool, 17 May 2025 (Stefan Antonov's review).
[^kostadinov]: Kostadin Kostadinov (Vazrazhdane / „Възраждане“) — that "the fall of the currency board frees 74bn leva for the government to spend" without a parliamentary vote, which he called "a colossal theft". See BTA, 8 February 2025; an earlier ≈40bn framing in Mediapool, 17 May 2025.