Social Partners Remain Divided Over 2025 Draft Budget

"We have made efforts to propose a draft budget that meets public demands. There is no planned increase in taxes, no introduction of new taxes, and no freezing or reduction of incomes and pensions, so the budget is the feasible one." This was stated by Finance Minister Temenuzhka Petkova on February 24 following a meeting of the National Council for Tripartite Cooperationthe for the 2025 draft budget.

She expressed her gratitude for the constructive dialogue with the social partners.

"During the council, the draft budget for 2025 was presented. It fully meets the requirements for public finances. The proposed draft has a deficit of up to 3% of GDP, with expenditures at up to 40% of GDP," noted Temenuzhka Petkova.

Deputy Prime Minister Tomislav Donchev also stressed that this is "the possible budget".

Tomislav Donchev, Deputy Prime Minister:
"The council session has concluded, where the three budget laws were reviewed with the necessary degree of polyphony. I would be concerned if employers and trade unions were in agreement, as that would be suspicious. A general consensus has been reached that this is the feasible budget."

Borislav Gutsanov, Minister of Labour and Social Policy:

"The most vulnerable groups in Bulgaria should remain calm, knowing that throughout the year, all social benefits will be preserved, including the indexation of pensions under the Swiss rule. In this difficult situation, we managed to ensure that all citizens of the republic can remain calm."

The social partners remain divided in their positions on this year's budget.

Vasil Velev, President of the Bulgarian Industrial Capital Association (BICA):

"Employers supported the government's efforts to control the budget deficit, consolidate budgetary expenditures, and restore financial stability to make Bulgaria's membership in the eurozone possible by 2026. However, BICA did not support any of the three budgets, as we believe the budget's redistributive role is unacceptably increasing. Much more income is being taken from households and enterprises, from the real sector, and is being funneled into unreformed systems, which does not increase the economy's competitiveness or create the conditions for economic growth. The highest tax in Bulgaria, labour tax, is expected to increase from 53% to 57% over the next few years, which is driven by excessive spending. We made proposals for salary increases in the budgetary institutions to be made only with corresponding reductions, as the number of people employed in the budgetary sector has not decreased, despite the declining population in the country over the past 10 years. A particularly glaring example is the public order and security system, where the average labour costs actually exceed three times the labour costs in the economy. In other words, people employed in the economy are paid three times less than those in these systems. We believe this is unjust, and reforms are needed to optimise salaries."

Dobri Mitrev, President of BIA:

"BIA supported all three budgets with reservations. The positive aspects of the budgets include increases in the budgets for social security and health insurance. This is the feasible budget, and we clearly acknowledge the fragile majority in the Bulgarian parliament. It is obvious that we cannot expect major reforms in this budget, especially given the four years of recklessness in the Bulgarian parliament concerning budgetary expenditures, particularly in terms of salaries. By the end of 2028, we are projected to have a debt of approximately 90 billion leva, which is 36% of GDP, and that is quite concerning. There are concerns about the collection of direct and indirect taxes. We objected to the increase in the maximum insured income. We believe that the incomes of the administrations directly working with citizens and businesses should be increased, as there is a shortage of personnel to carry out such activities due to low wages."

Plamen Dimitrov, President of the Confederation of Independent Trade Unions in Bulgaria (CITUB):
"We have a clear position, and it conditions our possible support for all three budgets. The figures and the framework pressing us on expenditures will soon put us at the table for a serious discussion about the tax and social security system – from whom we take and where we give. We have achieved that 21% of GDP will go to social protection and healthcare expenditures for 2025, which is a record high, both in absolute terms and as a share of GDP. The average percentage in the EU is 24%."

The draft budget is expected to be voted on today in the Council of Ministers and submitted to the National Assembly.