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Bulgaria’s deficit under EU fiscal rules

New proposalUpdated 25 Jun 2026
Editorial illustration of stack of budget ledgers for Council Decision on Bulgaria’s Excessive Deficit
Latest official update

European Commission · 25 Jun 2026

EUR-Lex

Bulgaria’s Deficit Under EU Fiscal Rules

The proposal is for a Council decision on whether Bulgaria has an excessive deficit.

What this update means

2 min read

What is happening

On 25 June 2026, the European Commission proposed—not decided—that the Council find an excessive deficit in Bulgaria. The proposed decision would be addressed to Bulgaria. It concerns the deficit criterionThe Treaty test applied here to Bulgaria’s government deficit. Its reference value is 3% of GDP., the EU Treaty test whose reference value is a government deficit of 3% of gross domestic product, or GDP.1

Eurostat data provided on 22 April put Bulgaria’s 2025 government deficit at 3.5% of GDP. Bulgaria did not report a planned 2026 deficit to Eurostat, while the Commission’s Spring 2026 Forecast projected 4.1% and continued deficits above 3% in 2027. The Commission says the 2025 and forecast 2026 figures are above and not close to the reference value, and the excesses are not temporary.1

Bulgaria’s government debt stood at 29.9% of GDP in 2025, below the separate Treaty reference value of 60%. The Commission therefore says Bulgaria met the debt criterion. However, it assessed other relevant factors overall as aggravating and concluded that Bulgaria did not meet the deficit criterion.1

Why it matters

The excessive deficit procedureThe process under Article 126 of the EU Treaty that provides for the Council to decide whether an excessive deficit exists in a member state. is the process under Article 126 of the EU Treaty through which the Council decides whether an excessive deficit exists in a member state. It forms part of the Stability and Growth Pact. The Commission says the pact seeks sound and sustainable government finances to support stability, growth and employment.1

The Council activated Bulgaria’s national escape clauseA clause activated for Bulgaria to facilitate increased defence spending during 2025–2028. When a national escape clause is active, the Commission and Council may decide not to conclude that an excessive deficit exists. on 8 July 2025 to facilitate increased defence spending during 2025–2028. The Commission says increased defence spending since 2024 fully explains the 2025 excess, making it exceptional, but does not fully explain the forecast 2026 excess. It therefore considers that the provision allowing no excessive-deficit conclusion when an escape clause is active does not apply.1

What happens next

The Commission sent its opinion to Bulgaria and informed the Council on 25 June 2026. Under Article 126(6), the Council is to consider any observations Bulgaria wishes to make and then decide, after an overall assessment, whether an excessive deficit exists.1

Bouleon Brief

2 min read

What is happening

The Commission’s 25 June text is a proposal, not a Council decision. It asks the Council to find that Bulgaria has an excessive deficit because it does not meet the deficit criterion. Under Article 126(6 of the Treaty on the Functioning of the European Union, the Council is to consider Bulgaria’s observations and make an overall assessment before deciding.1

Eurostat data provided on 22 April put Bulgaria’s 2025 general government deficit at 3.5% of GDP. Bulgaria did not report a planned 2026 deficit to Eurostat; the Commission’s Spring 2026 Forecast projected 4.1% and continued excess above 3% in 2027. The proposal assesses the 2025 result and 2026 projection as above and not close to the 3% reference value, with the excesses not considered temporary.1

Government debt stood at 29.9% of GDP in 2025, below the Treaty reference value of 60%. The Commission’s proposal therefore assesses Bulgaria as meeting the debt criterion but not the deficit criterion. It also assesses the relevant factors overall as aggravating, particularly because the deficit was forecast to rise well above 3% in 2026.1

Why it matters

The excessive deficit procedureThe EU Treaty process that provides for a decision on whether an excessive deficit exists. is the EU Treaty process for deciding whether an excessive deficit exists. It examines deficit and debt against separate reference values. In this case, the proposed finding rests on the deficit criterion even though Bulgaria’s debt was below its reference value.1

The national escape clauseA mechanism that, when activated, allows the Commission and Council to decide not to conclude whether an excessive deficit exists. Bulgaria’s clause was activated to facilitate increased defence expenditure in 2025-2028. is central to the distinction between the two years. The Council activated Bulgaria’s clause for 2025-2028 to facilitate increased defence spending; CEPS describes such clauses as temporary flexibility for defence-related deviations from agreed spending paths. The Commission considered the 2025 excess fully explained by increased defence spending since 2024, but said the projected 2026 excess was not.123

What happens next

The Commission asked the Council to make the Article 126(6) decision after considering Bulgaria’s observations and conducting an overall assessment. If the Council follows the proposed text, its decision would find that an excessive deficit exists because Bulgaria does not comply with the deficit criterion, and the decision would be addressed to Bulgaria.1

Policy journey

New proposal

No later official step is currently published.

  1. New proposalEuropean Commission · 25 Jun 2026