Bulgaria is facing a new round of fiscal scrutiny from Brussels after the European Commission concluded that the country is on course to breach the EU’s budget deficit rules and recommended the launch of an excessive deficit procedure.
According to the Commission’s assessment, Bulgaria’s public sector deficit rose from 3% of GDP in 2024 to 3.5% in 2025 and is expected to widen further to 4.1% in 2026 and 4.3% in 2027. Brussels argues that the deficit now exceeds the EU’s 3% reference threshold and can no longer be justified by increased defense spending under the national derogation clause.
European Commissioner for Economy Valdis Dombrovskis said the Commission had determined that Bulgaria no longer meets the deficit criterion. “From this year onwards, the excess above 3% of GDP is no longer explained by additional defense spending,” he noted, adding that the next step is for the Economic and Financial Committee to issue its opinion before the Commission formally proposes opening the procedure.
The Commission’s forecasts do not include immediate financial penalties. Any decision on the existence of an excessive deficit and the corrective measures required will have to be approved by the Council of the European Union.
