Budget 2026: Unions and Employers Criticise Parameters of Financial Framework

Budget revenues are not enough to meet government expenditure — that was the consensus among experts appearing on BNT’s morning programme “The Day Begins” on October 31.

Employer representatives warn that the private sector will suffer serious consequences from higher social security contributions, while trade unions argue that wage growth in Bulgaria remains inadequate.

Gaps also persist in the pension system, which has yet to be reformed.

There are gaps in the pension system, which remains unreformed.

The Fiscal Council has proposed three measures to reduce public spending: reducing municipal administrations through municipal mergers, cutting the number of police officers in line with the shrinking population, and obliging civil servants to pay their own social security contributions.

“The state administration is a heavy burden — and each year it becomes even heavier. Bulgaria’s population is declining, electronic services are being introduced, yet the number of civil servants continues to grow,” said Dobrin Ivanov of the Bulgarian Industrial Capital Association (BICA).

According to the Fiscal Council, more than 91,000 people are employed in the state administration. While employers insist these employees should shoulder their own social contributions, trade unions oppose the idea.

“The Ministry of Finance has no interest in contributions being shown on civil servants’ payslips, because that would increase reported expenditure,” commented Atanas Katsarchev, Chief Economist at the 'Podkrepa' Trade Union.

Meanwhile, although the State Social Security Budget has not yet been officially published, it is already clear that social security contributions will rise by two percentage points.

“In reality, the private sector will take a double hit. Net wages will fall, and labour costs for employers will rise,” Ivanov added.

Experts noted that the main cause of rising contribution burdens is the absence of pension reform, leading to deeper deficits at the National Social Security Institute.

“It is clear that the analysis commissioned by Parliament on the pension system — and proposals to ensure financial sustainability — are still missing. To be frank, our pension system runs a deficit of around 50%,” said former Social Minister Hristina Hristova.

Trade unions also criticised the lack of transparency regarding public finances.

“Firstly, there are no announced policies on anything. Secondly — where are the tax laws, which should have been passed beforehand?” said Katsarchev.

Based on information disclosed so far, changes to tax legislation linked to the budget will be included in its transitional and final provisions.

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