The Ministry of Finance proposed half-hearted measures to optimize state administration

Finance Minister Temenuzhka Petkova is making a very modest attempt to optimize state administration against the backdrop of huge criticism of the work of civil servants. The new draft state budget for 2026 and the updated medium-term program show that the Ministry of Finance is proposing only two measures in this direction.

One is related to a comprehensive review of the state administration and the closure of vacant positions – an idea that was first mentioned and presented, albeit laconically, after Petkova's meetings with employer and trade union organisations dedicated to the preparation of the new budget. The Updated Medium-Term Budget Forecast states:

For the period 2026 – 2028 the Council of Ministers and municipal mayors, after review and assessment, shall optimize the total number of staff in the executive branch administration under Articles 36-38 of the Administration Act with the aim of achieving a reduction in the total number of at least 5,500 positions, which have been permanently vacant for more than six months, distributed proportionally over the period."

The idea of downsizing the state administration by at least reducing the number of vacant positions is not new, but has been floated in expert circles for at least the last 10 years as a way to cut costs when drafting a new state budget.

The reduction figure chosen by the Ministry of Finance appears to be aimed at satisfying the demands of the business community. During the debate on the controversial first draft of the 2026 budget, it was proposed by the Bulgarian Industrial Association (BIA) as a way to save €140 million. However, the total number of these "empty" positions, which are mainly used to inflate the budgets of government agencies, with the money then being distributed as bonuses, is over 10,000. The chairman of the budget committee, Delian Dobrev, expressed the opinion that all these positions could easily be cut, saving a total of €500 million.

How many people are supported by the state?

Economic.bg checked the data on the state of the state administration, which showed a steady increase in the number of open positions. The latest data for 2024 shows that the total number of positions as of December 31 of that year was 145,802. Of these, 108,527 are in the central administration, while another 37,275 are in the territorial administration.

However, it should be noted that this figure only includes structures that support the executive authorities in the exercise of their powers. That is: ministries, agencies, commissions, regional and municipal administrations, and other bodies with administrative functions.

Separate from these are the employees in the Ministry of Interior system – police, fire department, etc. – who, according to data from 2024, number close to 50,000. The military is also not included, as their numbers are more difficult to determine, but the Development Plan of the Bulgarian Armed Forces until 2026 stipulates that a total strength of no less than 43,000 people should be maintained. However, more than one defense minister has admitted that there is a shortage of at least 20% of the required number of personnel.

If we include those working in state-owned companies, such as hospitals, schools, universities, etc., the number of people working for the state probably exceeds 500,000.

No automatisms

The second optimization measure proposed by the Ministry of Finance is related to the determination of the salaries of the executive authorities. More specifically, it states:

In 2026, the individual basic monthly salaries of the central and territorial executive authorities, as well as those specified in Article 19, paragraph 4 of the Administration Act, shall be determined at the level of the last individual basic monthly salary determined as of December 31, 2025, unless otherwise provided by law. Changes to the individual salaries of these bodies after December 31, 2026, shall be determined within the limits of personnel expenses and in accordance with the percentage increase in the salaries of public sector employees.

It is noteworthy that the automatic mechanism is not actually being abolished, but its operation is only being suspended for 2026. From 2027, it will be operational again, unless the "handbrake" is applied again. Thanks to these links, salaries in the Ministry of Interior, the Ministry of Defense, and the security services increased by up to 70% in 2025, and huge increases were also planned for next year. In other words, if there are no protests next year to scare Boyko Borisov, salaries in the security agencies may again jump by 50-70% while continuing to be ineffective.

We would like to remind you that one of the agreements reached between the Ministry of Finance, business, and trade unions is the elimination of automaticity in calculating salary increases in the budget sector.

Translated with DeepL.