On 8 July 2026, the Council of the European Union adopted a decision determining that Bulgaria has an excessive deficit, triggering the EU's excessive deficit procedure (EDP) under the Stability and Growth Pact. The decision, which corrects the interinstitutional file number to 2026/0177 (NLE), was addressed to the Committee of Permanent Representatives and the Council itself.
The EDP requires Bulgaria to take corrective fiscal measures to bring its deficit below the EU's reference value of 3% of GDP. The decision follows an assessment by the European Commission, which likely identified a breach of fiscal discipline. Bulgaria, as an EU member state, is now subject to enhanced surveillance and may face recommendations for fiscal consolidation.
This move has significant implications for Bulgaria's fiscal policy. The country may be required to implement austerity measures, such as spending cuts or tax increases, to reduce its deficit. Failure to comply could result in financial penalties or suspension of EU funds. The decision also signals EU oversight over national budgets, potentially limiting Bulgaria's fiscal autonomy.
For EU institutions, the decision reinforces the credibility of the Stability and Growth Pact. For Bulgaria, it may affect borrowing costs and investor confidence. The European Commission will monitor Bulgaria's progress and may propose further steps if corrective action is insufficient. The Council's decision is a formal step in the EDP, which could lead to a Council recommendation on specific measures Bulgaria must take.