Bulgaria has not yet sent its draft budget to Brussels

At this stage, we have not seen a more detailed draft, but our understanding is that the Bulgarian authorities are aiming for a budget deficit below or within 3% next year. This was stated by European Commissioner Valdis Dombrovskis in an interview with BNR on Monday, November 3.

We recall that on October 23, Prime Minister Rosen Zhelyazkov said that "in the coming days" the government would send the budget to Brussels.

If we do not consult on the budget by October 24, Brussels will make its calculations and assumptions based on current legislation, without the policies we would propose. That is why Brussels will receive the draft within the next few days," Zhelyazkov said at the time.

Now Dombrovskis explains that it is the obligation of eurozone member states to submit their draft budgets to Brussels by mid-October. But since Bulgaria is not yet in the currency union, there is no such categorical obligation for it.

Regarding the deficit, he says that Bulgaria has some fiscal flexibility, as the country has requested the activation of the national derogation clause in order to increase defense spending.

This clause allows for an increase in defense spending to 1.5% of GDP above the 3% limit required by the fiscal rules of the Maastricht Treaty. In its medium-term fiscal structural plan, Bulgaria has committed to complying with the 3% limit," Dombrovskis added.

The European Commissioner also commented on the funds expected under the Recovery Plan, which Finance Minister Temenuzhka Petkova expects this year to plug the huge "hole" in the budget. According to her, money will come from both payments, but for now only about €400 million of the second payment is certain. Together, if paid in full, the two payments amount to over €2 billion.

We are working with the Bulgarian authorities on the implementation of the Plan. We can make at least a partial second payment because, as you know, there is one of the reforms related to the Anti-Corruption Commission that has not yet been implemented. We are in contact with the Bulgarian authorities on how to deal with this situation," said Dombrovskis.

According to him, it is "theoretically possible" to apply for the third payment later this year.

"In any case, it is worth noting that the deadline for implementing the Plan and investments is approaching. All stages and targets must be completed by the end of August 2026. There is less than a year left for implementation. So the focus now really needs to be on implementing all the reforms and investments and making maximum use of this recovery and sustainability mechanism," added the European Commissioner.

Translated with DeepL.