Just weeks after the government
of the E.U. state of Bulgaria resigned amid protests against the rampant corruption,
the state traded in its currency, the levs, which means lion, for the federal currency,
the euro. In the new year, 2026, Bulgaria stood to relieve holders of the state’s
debt and to tame the endemic inflation that has plagued the state’s economy. In
November, 2025, for example, food prices had risen by 5% year-on-year, “more
than double the eurozone average.”[1]
The term “eurozone” is actually problematic, as it, like the application of the
jargon, “bloc,” to the E.U. itself is meant to obfuscate readers regarding the genre
of the political, federal union. To claim that Bulgaria joined a currency zone
is inferior stating that the state adopted the federal currency. Stated
properly, the currencies in the E.U. can be compared with those that were in
the early U.S., and all of those combinations of state and federal currencies can
be held to be compatible with federalism.
When the U.S. “bloc” began in
1776, the members were sovereign countries and therefore they had their own
currencies. The federal dollar commenced in 1785. The member-states had their
own currencies until 1788, so those currencies were concurrent with the federal
dollar for three years. The E.U.’s model has been that state governments can
choose whether to retain their own currency or adopt the euro, so no state can have
both its own currency and the euro as legal tender at the same time. The E.U.
and U.S. provide us with various combinations regarding currencies in a federal
system, none of those combinations being at variance with federalism itself. In
fact, the salient feature of dual-sovereignty that characterizes early-modern
federalism—which is distinct from confederalism, wherein the states hold all
rather than just some of governmental sovereignty—is arguably most consistent
with two currencies being legal tender. This is not to say that the U.S. got this
right for three years when both state and federal currencies were legal tender
in their respective jurisdictions. The American “bloc” was a confederation
until 1989, after which the federal governmental institutions and the states both
had at least some portion of the governmental sovereignty in the system. When dual-sovereignty
came into effect, only the federal currency was legal tender throughout the
union.
Of course, like the U.S. in
its first several decades, the E.U. in 2025 still suffered from being dominated
by its states at the expense of collective action at the federal level. Because
one of the chief benefits of a federal system of dual sovereignty is that the
states can operate as a check against excessive federal encroachment and the
federal institutions can operate as a check against excesses, such as
corruption and anti-democratic tyranny, in state governments. The latter check has
been severely hampered in the E.U. because the state governments dominate even
at the federal level. The adoption of the federal currency by Bulgaria can be
viewed as a step in the direction of achieving federal-state balance of power because,
as Christine Legarde, president of the E.U.’s central bank, said at the time,
the euro is a “powerful symbol” of “shared values and collective strength.”[2]
Such strength has been the big loser as the heads of the state governments have
resisted, as per their political self-interest, proposing and voting for
additional transfers of governmental sovereignty to the federal governmental
institutions (i.e., government) in the executive and legislative branches.
So perhaps it can be said that dual currencies fits best with dual sovereignty, at least theoretically, but that this presupposes a balance of power between the state and federal governmental institutions. In the case of a “bottom-heavy” federal system, such as the U.S. was through the nineteenth century, and as the E.U. has been through at least its first three decades, as many states as possible should replace their respective currencies with the euro. Admittedly, even if the 27 rather than just 21 E.U. states would adopt the euro, this would not in itself mean that the E.U.’s hand would be strengthened in defense and foreign policy to push Russia back from Ukraine and Israel out of Gaza and the West Bank. Given the tremendous imbalance of power, however, such that the E.U. has had trouble in asserting collective action for the benefit of the whole union rather than just a few states, a powerful symbol of collective strength could help to dispel the allure of the anti-federalist, or Euroskeptic, ideology.
That intangible benefit is irreducibly political, and as such, it can be easily dismissed by E.U. citizens who are in denial regarding the distinctively political genre of their union. For such people, the adoption of the federal currency by more states is viewed primarily as potentially strengthening weak state economies and bad monetary policies. This applies especially to the adoption by small, corrupt states—Bulgaria being roughly equivalent to Maryland in population in 2025. After being turned out of office by mass protests against the systemic governmental corruption, the state government of Bulgaria certainly could not be relied upon to resist the temptation to inflate its currency given the public debt there. Generally speaking, corrupt people lack the self-discipline necessary to govern anything. The E.U.’s central bank was much more reliable, especially with Lagarde having been at the helm for many years, than the government of the E.U. state of Bulgaria. As salient as this benefit is in the state’s adoption of the euro, the impact, although subtle and largely symbolic, on European political integration, already under way, is worthy enough not to be relegated or ignored outright. The power of symbol can be louder in the long run that a lion’s roar.
2. Ibid.
