The European Commission will firmly continue with the procedure to declare Bulgaria in excessive deficit. The government will submit the new budget to Parliament for debate by the end of June.
This was stated by Deputy Prime Minister and Finance Minister Galab Donev during a Question Time and parliamentary oversight session on June 5.
The government's ambition is to produce a budget for the remaining six months of the year that comes as close as possible to a 3% deficit. However, given the limited timeframe, Mr Donev warned against expecting miracles. The budget will include long-term measures rather than short-term accounting adjustments, which he said had been the practice of previous administrations, in order to achieve the fiscal targets.
Yesterday, a European Commission mission held meetings with representatives from several ministries concerning macroeconomic imbalances, the state of public finances, and the implementation of the Recovery and Resilience Plan. There has been no change in Brussels' position, Donev announced.
Galab Donev, Finance Minister:
"The Commission will firmly proceed with the procedure to declare Bulgaria in excessive deficit for 2025. This procedure was initiated following the Commission's assessment of net expenditure for 2025."
However, it has emerged that the European Commission's projected deficit figures for 2026 and 2027 differ from those of the Ministry of Finance. Minister Donev acknowledged the discrepancy, explaining that the caretaker government had not submitted updated data to Brussels.
Galab Donev, Finance Minister:
"According to the Commission's calculations, Bulgaria's deficit will stand at 4.1% in 2026 and 4.3% of GDP in 2027."
And he announced what specific measures the European Commission will ask Bulgaria to take.
Galab Donev, Finance Minister:
"One of the measures – and what the Commission made clear it will request following yesterday's discussions – is that net expenditure should be reduced by 0.5% of GDP, alongside spending restraint and a review of the structure of expenditure in our budget."
He also announced that the government would have the draft of the new budget ready by the end of the month.
Galab Donev, Finance Minister:
"The Ministry of Finance and, accordingly, the Council of Ministers are aiming to submit the draft budget by the end of June for consideration by the National Assembly. Our objective is to achieve the lowest possible budget deficit, as close as possible to 3%, though how far above that level it may be will depend on the final calculations."
The draft budget will include a contingency buffer with anti-crisis measures aimed at protecting businesses and citizens from the economic consequences of the war in the Middle East.
Photos by BTA
Deputy Prime Minister Atanas Pekanov reported progress in securing the final tranches under the Recovery and Resilience Plan. However, the situation is less positive when it comes to funding under the Just Transition Plan.
Atanas Pekanov, Deputy Prime Minister:
"The issue of the Just Transition Fund is particularly challenging. There have been significant delays. So far, only 40% of the funding has been contracted and just 7.5% has actually been disbursed. This is a fund worth €1.1 billion, available to Bulgaria specifically to create new jobs and opportunities for people in the coal-mining regions, so that their future livelihoods are not put at risk."
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