The Council of the European Union has decided that an excessive deficit exists in Bulgaria, citing a general government deficit of 3.5% of GDP in 2025 and a projected 4.1% in 2026, both above the 3% Treaty reference value. The decision, adopted on 8 July 2026, triggers the excessive deficit procedure (EDP) under Article 126(6) of the Treaty on the Functioning of the European Union.
The Council's assessment, based on Eurostat data from 22 April 2026 and the Commission's Spring 2026 Forecast, found that the 2025 deficit exceeded the threshold and was not close to it, while the 2026 projection also breaches the limit. The deficit is expected to remain above 3% in 2027. Bulgaria's general government debt stood at 29.9% of GDP in 2025, well below the 60% reference value, so the debt criterion is fulfilled.
On 8 July 2025, the Council had activated a national escape clause for Bulgaria to increase defence expenditure for 2025–2028. However, the Council determined that this clause does not fully explain the projected 2026 deficit excess, and therefore Article 2(5) of Regulation (EU) No 1467/97, which allows for temporary deviations under certain conditions, does not apply.
The decision is addressed to the Republic of Bulgaria. As a next step, the Council will issue a recommendation setting a deadline for Bulgaria to correct the excessive deficit, typically within one year. The EDP aims to restore fiscal discipline and may involve enhanced monitoring and policy recommendations.
The Bulgarian government will face pressure to implement fiscal consolidation measures, potentially affecting public spending and investment. Bulgarian taxpayers may experience tax increases or reduced public services. EU institutions gain leverage to enforce fiscal rules, while other EU member states may view the decision as a test of the reformed Stability and Growth Pact's credibility.