The European Commission has proposed that the Council adopt a decision declaring the existence of an excessive deficit in Bulgaria, triggering the EU's corrective fiscal procedure. The proposal, dated 6 July 2026 and addressed to the Council Secretary-General, is based on Article 126(6) of the Treaty on the Functioning of the European Union. A corrigendum (COR 1) corrects the interinstitutional file number to 2026/0177 (NLE) in the original proposal (ST 10950/26 INIT).
The excessive deficit procedure (EDP) is the EU's mechanism to correct government deficits that exceed the reference value of 3% of GDP or public debt above 60% of GDP. Once the Council formally establishes the existence of an excessive deficit, the member state concerned must take corrective action within a specified timeframe, typically submitting a plan for reducing the deficit. The Commission's proposal marks the first formal step in this process for Bulgaria.
No prior coverage of this specific proposal exists in recent months. The move follows the Commission's regular assessment of member states' fiscal positions under the Stability and Growth Pact. Bulgaria's deficit has reportedly breached the 3% threshold, prompting the Commission to recommend the EDP.
If adopted by the Council, the decision will require Bulgaria to implement corrective measures, potentially including spending cuts or tax increases, to bring its deficit back within EU limits. The procedure also allows for monitoring and, in case of non-compliance, possible sanctions. The proposal now awaits discussion and a vote in the Council, where member states will decide on the existence of the excessive deficit.
The Bulgarian government will face pressure to adjust fiscal policy, potentially affecting public services and investment. Bulgarian taxpayers may bear the cost of consolidation through higher taxes or reduced public spending. EU institutions, particularly the Commission and the Council, will monitor compliance, reinforcing fiscal discipline. Financial markets may view the EDP as a signal of fiscal strain, potentially affecting Bulgaria's borrowing costs.