FILE PHOTO – Bulgarian Prime Minister Rumen Radev attends a joint press conference with German Chancellor Friedrich Merz following their meeting at the Federal Chancellery in Berlin. (is associated with: «EU takes measures to make Bulgaria reduce excessive debt») Michael Kappeler/dpa
Bulgaria is facing an EU penalty procedure over excessive new debt, the authorities in Brussels said on Friday.
The Council of the European Union – the body representing the governments of the EU member states – followed a recommendation by the European Commission from June to initiate the procedure.
The aim of the “excessive deficit procedure” (EDP) is to bring states towards sound fiscal management and safeguard the stability of the eurozone.
Bulgaria’s deficit is to be brought back below the EU upper limit of 3% by 2029, with 4.1% forecast for the current year, according to the statement.
“The Council’s decision to open an EDP today is due to Bulgaria’s projected 2026 government deficit of 4.1% of GDP, which is expected to continue exceeding 3% of GDP in 2027,” it said.
Some countries are currently allowed to take on more debt under a special rule for defence spending. However, the Friday statement said that “Bulgaria’s use of the national escape clause for defence spending… does not fully explain the excess above the 3% threshold.”
Prime Minister Rumen Radev said at the start of a government meeting on Thursday that he had “inherited a looted state coffer.” At the NATO summit, he told allies that Bulgaria would support Ukraine in line with its own capacities, but that at the present time there were no such capacities.
Because of the government crisis in 2025/2026, Bulgaria is still operating under an extended budget for last year, although the new centre-left government has now submitted a draft 2026 budget to parliament.
The European rulebook for budget deficits and public debt allows new borrowing of no more than 3% of GDP, while a member state’s debt level must not exceed 60% of economic output.
Deficit procedures are also currently under way against Finland, France, Italy, Belgium, Hungary, Malta, Poland, Romania, Austria and Slovakia.