EC sees grounds for excessive deficit procedure against Bulgaria

Тhe European Commission is launching an excessive deficit procedure against Bulgaria, according to a report published as part of the spring economic forecast under the European Semester. For now, no financial sanctions are foreseen, BNR correspondent in Brussels Angelina Piskova reported.

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The general government deficit increased from 3% of GDP in 2024 to 3.5% in 2025, according to Eurostat data. The report states that the rise last year is mainly due to increased public-sector wages - particularly in defence and security - higher social spending, including the automatic indexation of pensions, as well as investment subsidies for the Bulgarian Energy Holding.

The European Commission’s spring forecast projects a deficit of 4.1% of GDP in 2026 and 4.3% the following year.

"The problem in Bulgaria is that for several consecutive years there has been a highly unstable political situation, with difficulties in forming governments. Caretaker governments clearly saw that spending was going off track, but they did not have the authority to intervene. Obviously, this is now the first task for the new government, which appears to have a more solid majority and is committed to addressing the issue. However, given the accumulated imbalances, this is unlikely to be resolved in the short term," said a Brussels-based expert. He added that the euro cannot be the cause of the excessive deficit.

Edited by Diana Tsankova