site.btaMedia Review: November 4

ECONOMY – EURO INTRODUCTION – CONFERENCE

The “Bulgaria on the Doorstep of the Eurozone” conference dominates the media headlines on Tuesday morning. The high-level forum was held in Sofia and attended by senior Bulgarian and European officials.

Mediapool leads with a story about conference. Prime Minister Rosen Zhelyazkov said at the forum that adopting the euro is not merely a financial step but a strategic choice that affirms Bulgaria’s place in a united and strong Europe.

The event, organized by the Ministry of Finance and the Bulgarian National Bank, gathered leading financial figures in Sofia, including ECB President Christine Lagarde, IMF Managing Director Kristalina Georgieva, and European Commissioner for the Economy Valdis Dombrovskis. The conference is part of the national communication campaign to prepare for the introduction of the single currency at the beginning of next year.

Zhelyazkov described eurozone membership as a decision of major political, economic, and social importance, recognizing the consistent efforts of Bulgarian institutions and citizens. He noted that the process has been long and challenging since Bulgaria’s EU accession and emphasized that success depends not only on institutional work but also on public trust, which he said remains positive despite anti-European narratives.

IMF head Kristalina Georgieva underlined fiscal discipline and sound monetary policy as key to Bulgaria’s readiness, saying the country is “more than prepared” for the transition thanks to its currency board and previous reforms. She said Bulgaria can expect significant benefits, citing Croatia’s successful euro adoption in 2023.

Ahead of the event, the Finance Ministry published Bulgaria’s first draft budget in euros, planning a 3% deficit of GDP and allowing for new borrowing of up to EUR 10.5 billion. EU Commissioner Dombrovskis said Bulgaria aims to keep the deficit within the EU limit while using some fiscal flexibility to increase defence spending.

BNB Governor Dimitar Radev commented that Bulgaria should focus on “good debt” for strategic investment rather than borrowing to finance consumption. 

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Dnevnik contributes by quoting IMF Managing Director Kristalina Georgieva, who described at the conference Bulgaria’s entry into the euro area as a “hard-earned achievement” and added that it is natural to feel a certain nostalgia for the lev. She said she expects “more people to come to our beautiful beaches and spend their euros in our economy.”

“I want us to stay grounded. The euro, by itself, does not guarantee a higher standard of living,” Georgieva added.

She noted that this step must be accompanied by sound policies aimed at raising Bulgaria’s purchasing power and living standards.

Georgieva also pointed to the risks facing the Bulgarian economy, including a boom in mortgage lending and a sharp rise in property prices, which, in her words, “are skyrocketing.” She said similar trends can be observed in Bulgaria and in other economies showing signs of overheating.

“Bulgaria faces difficult challenges — the population is shrinking, and the brain drain continues to hit us,” Georgieva said.

She emphasized the need for responsible policies to address these problems, including maintaining fiscal discipline. Her remarks came just hours after the presentation of the 2026 draft budget, which foresees higher public spending and a 3% deficit.

Georgieva also stressed the importance of policies that attract foreign talent and encourage Bulgarians abroad to return home. 

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Bulgarian National Radio (BNR): Bulgaria is ready to introduce the euro smoothly, Prime Minister Rosen Zhelyazkov said at the opening of the conference “Bulgaria on the Doorstep of the Eurozone.”

Zhelyazkov noted that the success of the euro’s introduction also depends on public trust, although that trust, he said, has been deliberately undermined through false suggestions and fearmongering.

“At present, trust has a seven-percentage-point advantage. From the very beginning until today, the position of Bulgarian businesses has been and remains in support of this step. Since the moment we received a clear date for the euro’s introduction and began actively explaining what people can expect, confidence has been growing steadily. Even the most convinced skeptics will eventually realize that their fears are exaggerated and unfounded,” the Prime Minister said.

He added that introducing the euro in Bulgaria carries great responsibility.

“We have been consistent in our commitments. We believe in Bulgaria’s European future. I am confident that on 1 January 2026, Bulgaria will welcome the new currency as a symbol of maturity — the maturity of our European democracy,” Zhelyazkov stated at the conference in Sofia. 

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NOVA TV: At a joint press conference following the “Bulgaria on the Doorstep of the Eurozone” conference in Sofia, ECB President Christine Lagarde and BNB Governor Dimitar Radev unveiled the design of Bulgaria’s euro banknotes, ahead of the country’s planned euro adoption on January 1, 2026.

Lagarde praised Bulgaria’s achievement, calling it the culmination of years of reforms and determination, and noted that support for the euro among Europeans is at a record 83%. She expressed confidence that Bulgaria will soon become part of this shared confidence in the single currency.

Radev thanked Lagarde and the European Central Bank for their consistent support, describing Bulgaria’s accession as a historic milestone that will open new prospects for growth and prosperity while bringing new responsibilities. He reaffirmed Bulgaria’s commitment to a stronger and more integrated Europe and said the country is ready to contribute actively to the development of the euro area.

Bulgarian National TV also covers the conference.

2026 STATE BUDGET

The 2026 State Budget Bill continues to dominate the headlines on Tuesday.

bTV: “We have a new year but the same old budget — there’s absolutely no difference compared to the last three or four years,” said economist Nikola Filipov in an interview on “This Morning” (bTV). He added that “we continue to slide along the axis of populism.”

The parameters of the 2026 financial framework were published on Monday evening, prompting an immediate reaction from both employers’ organizations and trade unions.

Economist Levon Hampartzoumian commented that Budget 2026 “looks like trying to extinguish a fire with gasoline,” because the planned increases are pro-inflationary.

“When you prepare a budget in the corporate world, you receive clear objectives — what you need to achieve with it — and you deliver. The Minister of Finance should come out and state what the goals of this budget are, and if compromises have been made, explain why,” Hampartzoumian added.

According to Filipov, only a weak government lacks the political will to freeze social payments in the name of reforms that would curb inflation and reduce the deficit.

“They’re clearly afraid of reforms. We don’t have much time. Bulgaria is facing a very delicate moment — we must carry out all the necessary reforms to put our public finances in order. We’ve fallen into a state of total stagnation. At the moment, I don’t see anything positive,” he said.

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Capital: Bulgaria’s draft Budget 2026 signals a familiar formula — higher taxes and social contributions, growing public payrolls, and new debt to plug the gaps. What it lacks, critics say, is reform or realism.

The government plans to spend 46 % of GDP (EUR 55 billion) next year, up 12 % from 2025, while keeping the official deficit at 3 %. Much of that balance relies on accounting maneuvers — shifting municipal investments to the state development bank and banking on VAT revenue growth of 35 %, far above recent trends.

The Finance Ministry expects slower GDP growth (2.7 %) and moderate inflation (3.5 %), yet revenue forecasts assume a boom. Employers warn that the planned two-point rise in social contributions and doubled dividend tax will deter investment and drive business underground.

Public debt is on track to reach 36.6 % of GDP by 2028, up more than 13 points in four years, as Sofia leans ever harder on borrowing instead of privatization — the latter expected to bring a symbolic EUR 1 million a year.

Meanwhile, public-sector pay continues to climb, especially for police, teachers, and the military, whose wages rise automatically. Payroll costs alone will reach 11 % of GDP.

To offset higher outlays, the government promises tighter oversight — new sales-reporting software, digital freight tracking, and stricter anti-evasion measures — but such “control through code” has yielded mixed results before.

The broader picture is one of fiscal expansion without structural change: a state that taxes more, spends more, borrows more, yet reforms little. Bulgaria may stay within EU deficit limits, but its long-term competitiveness could pay the price.

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24 Chasa runs an official response by the Finance Ministry regarding an article published by the newspaper about how taxes and social security contributions in Bulgaria reduce wages more than in the US and Switzerland. The Ministry refutes these claims by saying “We categorically disagree with the data presented in the 24 Chasa article titled ‘In Bulgaria, Taxes and Social Security Contributions Reduce Wages More Than in the U.S. and Switzerland’,” the Ministry of Finance said in its official response.

According to Ministry experts, Bulgaria is the only country that combines low social security contributions with a 10% flat income tax rate.

They noted that the 60-to-40 ratio in favor of the employee is also advantageous compared to other countries, where the employee’s share typically exceeds 50%.

“It cannot be said that there is a significant burden, since the increase in the individual social security contribution is only 0.88 percentage points,” the Ministry stated.

For comparison, Austria’s social security contributions are 10% higher than Bulgaria’s, while in Switzerland, taxes amount to nearly 60% of income, officials added.

The Ministry also emphasized that in Bulgaria, certain social rights can be accessed even by individuals who have not paid contributions, a legal provision that does not exist in most other countries.

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Duma: Bulgaria is among the EU countries with the highest share of employed people at risk of poverty, according to data from Eurostat. The study notes that the risk of poverty does not affect only the unemployed or those with low work intensity, but also people who are employed yet still unable to secure sufficient income for their households.

In 2024, 11.8% of employed Bulgarians aged 18 and over were at risk of poverty — well above the EU average of 8.2%. This places Bulgaria among the member states with the highest rates, alongside Luxembourg (13.4%), Spain (11.2%), and Greece (10.7%).

Eurostat data also show that the poverty risk among Bulgarian men stood at 13%, compared to 10.4% among women. The 2.6-point gender gap is close to the EU average, where men are more at risk (9%) than women (7.3%).

For comparison, the lowest shares of working people at risk of poverty were recorded in Finland (2.8%), Czechia (3.6%), and Belgium (4.3%).

The indicator “in-work poverty risk” covers people who are employed or self-employed and live in households with disposable incomes below 60% of the national median.

UKRAINE WAR - BALKANS

Trud’s main story is about the four fighter jets scrambled from Romanian air bases overnight after Russian strikes were detected targeting Ukrainian port infrastructure along the Danube River. The newspaper quotes Romania’s AGERPRES national news agency.

According to Romania’s Ministry of National Defence, two F-16 jets took off from the Fetesti Air Base at 12:17 a.m., followed by two German Eurofighter aircraft from Mihail Kogalniceanu Air Base at 2:45 a.m. Their mission was to monitor the situation and ensure the security of Romanian airspace.

Commanders were authorized to open fire on aerial targets if they entered Romanian airspace and posed a threat to civilian safety. The Ministry confirmed that no airspace violations were reported and no debris was found on Romanian territory.

The Bucharest Defence Ministry once again condemned the Russian Federation’s attacks on Ukraine’s civilian infrastructure, calling them a serious breach of international law and a threat to regional security.

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Darik: Bulgaria and North Macedonia will sign an agreement on November 6, 2025, to build and operate a cross-border railway tunnel linking the two countries. The document will be signed at the Gyueshevo railway station by Deputy Prime Ministers and Transport Ministers Grozdan Karadjov and Aleksandar Nikolovski.

The project, part of the “Western Balkans–Eastern Mediterranean” corridor and Corridor VIII, aims to establish the missing rail connection between the two nations, improving transport links between the Black Sea and the Adriatic.

The tunnel will be about 2.4 kilometers long, half of it on Bulgarian territory, and is expected to support regional economic growth and enhance EU and NATO transport integration.

Representatives of the European Commission, EU and NATO embassies, and major financial institutions including the EIB, EBRD, and World Bank will attend the signing ceremony.