EU formally opens excessive deficit procedure against Bulgaria
The Council of the EU approved on July 10 the European Commission’s recommendation to open an excessive deficit procedure against Bulgaria.
The decision by the EU finance ministers comes a year after the same body set Bulgaria’s euro zone accession date, the last in a series of procedural steps that were the result of Bulgaria meeting the euro convergence criteria, including the stability of public finances.
Twelve months later, that is no longer the case, with the European Commission last month saying that Bulgaria was set to exceed the three per cent deficit ceiling set in EU fiscal rules and recommending the opening of the excessive deficit procedure.
At the time, the EC projected a Budget deficit of 4.1 per cent of GDP in 2026. In its draft 2026 Budget package, however, the Cabinet of Prime Minister Roumen Radev has targeted a deficit of 5.7 per cent.
Bulgaria has been operating without a 2026 Budget, using the provisions of last year’s package, albeit with some spending restrictions, after the Rossen Zhelyazkov resigned at the end of last year as a result of large-scale protests triggered by its Budget proposal.
This, the Radev government has argued, has contributed to the larger deficit this year, as a number of automatic wage increases have further widened the shortfall in public finances.
In addition to formally opening the excessive deficit procedure, the Council of the EU said that Bulgaria had until October 15 to present the necessary measures to reduce its deficit.
Bulgaria should also ensure that its nominal cumulative net expenditure growth rate does not exceed 4.2 per cent in 2026, 7.7 per cent in 2027, 11.4 per cent in 2028 and 15 per cent in 2029, the Council of the EU said.
(Photo: Steve Ford/sxc.hu)
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