National Council for Tripartite Cooperation Discusses 2027 Budget: Trade Unions and Employers Approved the Financial Framework with Reservations

Employers and the Confederation of Independent Trade Unions in Bulgaria (CITUB) have backed the draft budget for next year, albeit with reservations and subject to certain conditions. The Confederation of Labour Podkrepa, however, has rejected the financial framework. This became clear following a meeting of the National Council for Tripartite Cooperation.

The projected budget deficit stands at 3.5% of GDP, while both revenues and expenditure are set at record levels. The draft budget provides for cuts in public administration and a 5% pay rise for employees in the public sector.

Employers support the proposed administrative reform and the scrapping of automatic pay rises in the public sector. However, they oppose the proposed excess profits tax.

Dobri Mitrev, chairman of the Bulgarian Industrial Capital Association (BICA):

“Its effect will be exhausted if it is introduced as early as next year, while we have expenditure that will remain permanent. More importantly, however, it undermines the predictability investors need. We are also concerned, of course, about the increase in public debt.”

The Confederation of Independent Trade Unions in Bulgaria (CITUB) has given conditional backing to the financial framework, while the Confederation of Labour Podkrepa has rejected it.

Yoanis Parteniotis, vice-president of the Confederation of Labour Podkrepa:

“The Confederation of Labour Podkrepa proposes the introduction of progressive taxation and a tax-free allowance equivalent to the minimum wage, as recommended in the conclusions of the European Commission's report.”

Asya Goneva, CITUB:

“There is sufficient scope to allocate additional funding for across-the-board income increases, raising the proposed 5% to 10%. We reiterate our demand for a higher minimum wage.”

According to the finance minister, the budget reflects the government's determination to address the inherited state of public finances. Donev described the financial framework as a budget of responsibility.

Galab Donev, Minister of Finance:

“The 2027 Budget is a budget of responsibility. It reflects the government's determination to address the inherited state of public finances and accumulated imbalances. The measures we are proposing take account of the realistic scope for fiscal consolidation in 2027 and subsequent years, as well as the objectives and priorities of sectoral policies.”

Businesses and trade unions also gave their backing, with reservations, to the draft budget of the State Public Social Insurance Fund.

Yoanis Parteniotis, vice-president of the Confederation of Labour Podkrepa:

“There is no link whatsoever between social security contributions and entitlements.”

Dobri Mitrev, chairman of BICA:

“We support measures to encourage parents to return to work. However, the additional incentives should be funded from the state budget.”

Asya Goneva, CITUB:

“The maximum monthly social security income should be increased in such a way that its ratio to the maximum pension and the minimum insurable income also rises, so that we can safeguard entitlements within the system.”

The draft budget of the State Public Social Insurance Fund provides for increases in pensions, maternity benefits during the second year of childcare leave, and the minimum and maximum unemployment benefits.

Atanaska Ivanova:

“That's good, of course. We'll have more money. More would be even better, if possible.”

Aleksandar Zhelev:

“Over the past few years, prices here in Bulgaria have risen by far more than people's incomes.”
The social partners also gave their backing, with reservations, to the draft budget of the National Health Insurance Fund.