Bulgaria sets price controls as euro transition nears

SOFIA (Reuters) -Bulgaria's parliament on Wednesday passed legislation introducing year-long price controls from August 8, a part of its technical transition process before adopting the euro currency in January.

The move comes after European Union finance ministers set the conversation rate of the Bulgarian lev to the euro this month, the final step for Bulgaria to become the 21st member of the euro zone.

Last month EU finance ministers gave formal support to the Bulgaria joining the euro after positive assessments of the country's readiness from the European Commission and the European Central Bank.

The law includes a grace period lasting until October 8 during which businesses are expected to begin dual labelling of prices and issue receipts showing amounts in both lev and euros, parliament's website said.

The legislation will enable the government to implement temporary countermeasures in case that the prices of basic staples and services rise sharply.

Sanctions for traders found to manipulate the prices unfairly will range from 2,556 euros ($2,930) to 511,290 euros ($586,245), and large retailers will be required to post the final sale prices of all basic staples and services on their websites daily under the law.

Bulgaria has been striving to switch from the lev to the euro since it joined the European Union in 2007. But many Bulgarians have lost their initial enthusiasm, with 50% now sceptical about the euro and fearing the currency switch will drive up prices.

Croatia was the last EU member country that joined the grouping at the start of 2023, and the accession of Bulgaria in 2026 will leave only six of the 27 EU countries outside it: Sweden, Poland, Czech Republic, Hungary, Romania and Denmark.

($1 = 0.8721 euros)

(Reporting by Daria Sito-Sucic and Stoyan Nenov; Editing by Alison Williams)