The Council of the European Union has formally determined that an excessive deficit exists in Bulgaria, citing non-compliance with the deficit criterion under the Stability and Growth Pact. The decision, adopted on 26 June 2026, follows Eurostat data from 22 April 2026 showing Bulgaria's general government deficit reached 3.5% of GDP in 2025, with the Commission's Spring 2026 Forecast projecting a further rise to 4.1% of GDP in 2026. Both figures exceed the Treaty reference value of 3% of GDP and are not considered temporary, with the deficit expected to remain above the threshold in 2027.
The Council's assessment notes that Bulgaria's general government debt stood at 29.9% of GDP in 2025, well below the 60% reference value, meaning the debt criterion is fulfilled. However, the deficit criterion is breached. The Council had activated a national escape clause for defence expenditure in Bulgaria on 8 July 2025, covering the period 2025-2028, but the projected 2026 deficit in excess of the reference value cannot be fully explained by increased defence spending since 2024. Consequently, Article 2(5) of Regulation (EU) No 1467/97, which allows for certain defence expenditures to be excluded from deficit calculations, does not apply. The Council's overall assessment of relevant factors is aggravating for Bulgaria.
The decision triggers the excessive deficit procedure (EDP), requiring Bulgaria to take corrective measures within a specified timeframe. The Bulgarian government will now need to submit a plan to reduce its deficit below 3% of GDP, with the Council expected to set a deadline for correction. The procedure could lead to financial sanctions if compliance is not achieved, though no sanctions have been imposed at this stage. The decision impacts Bulgarian taxpayers, who may face fiscal consolidation measures, and the national government, which must balance deficit reduction with economic growth objectives. EU institutions, including the Commission and the Council, will monitor Bulgaria's progress under the EDP.