Bulgaria's accession to the eurozone as of January 1, 2026, is undoubtedly a significant milestone for both the national economy and the local legislative framework. Along with the leading Law on the Introduction of the Euro in the Republic of Bulgaria, which we have already covered in issues 269 and 270 of our Legal Digest, an amendment is also being prepared in relation to the formula for calculating interest due on late payments.

Currently, the so-called “statutory interest” due on overdue private and public monetary obligations is calculated in accordance with Decree No. 426 of the Council of Ministers of 2014 on determining the amount of statutory interest on overdue monetary obligations (“the Decree”). It stipulates that the annual amount of statutory interest is equal to the sum of the base interest rate (“BIR”) set by the Bulgarian National Bank (“BNB”) and a surcharge of 10 percentage points.

In the Draft decree of the Council of Ministers amending the Decree (the "Draft") published on the Public Consultation Portal, a change is envisaged whereby the statutory interest rate will be equal to the interest rate on the main refinancing operations of the European Central Bank (“ECB”) plus 8 percentage points.

The amendment is dictated by the rules of Directive 2011/7/EU of the European Parliament and of the Council on combating late payment in commercial transactions, according to which the BIR for euro area Member States is the interest rate set by the ECB on its main refinancing operations. Thus, the BNB will no longer be competent to determine the legal interest rate and influence the amount of statutory interest, but will take into account the interest rate set by the ECB and published in the Official Journal of the European Union, effective from January 1 and July 1 of the respective year.

Undoubtedly, the reduced surcharge of 8 percentage points to the interest rate will also contribute to the faster settlement of overdue public and private debts. According to data from the Ministry of Finance, Bulgaria currently has one of the highest statutory interest rates on arrears in the entire European Union, precisely because of the 10 percentage point surcharge that has been in effect until now.

As a result of the new formula, the statutory interest rate is likely to decrease. Thus, in parallel with the integration of the Bulgarian economy with that of the EU due to the adoption of the euro, an improvement in financial discipline in the payment of both public and private debts can be expected. Undoubtedly, the changes are also beneficial to eurozone businesses, which will enjoy greater predictability regarding their monetary obligations when operating in Bulgaria.