site.btaParliament Adopts on First Reading Bulgaria's First Euro Budget

Over two consecutive plenary days and after hours of debate, Parliament adopted on first reading the draft budgets of the Public Social Insurance (PSI), the National Health Insurance Fund (NHIF), and the state budget for 2026. These are the first budgets denominated in euros for Bulgaria, which is joining the eurozone on January 1, 2026.

The MPs voted to reduce the deadline for submitting proposals before the conclusive vote to three days.

The three draft budgets were supported by GERB-UDF, MRF-New Beginning, BSP-United Left, There Is Such a People, and independent MPs. The opposition - Continue the Change-Democratic Bulgaria, Vazrazhdane, Alliance for Rights and Freedoms, and MECh - voted against. Velichie did not take part in the votes.

The planned budget deficit in next year’s draft budget amounts to 3% of the Gross Domestic Product (GDP), and the state debt is expected to reach EUR 37.6 billion (31.3% of GDP) in 2026. The cap on new state debt was set at EUR 10.5 billion, including up to EUR 3.2 billion under the SAFE instrument to strengthen the European defence industry.

Next year’s draft state budget provides for an increase of the dividend tax from 5% to 10% and introduces a requirement for businesses to use a revenue reporting software approved by the National Revenue Agency.

As of January 1, 2026, pension contributions will increases by 2 percentage points; the contributory threshold for self-insured persons rises to EUR 620.20 and the maximum contributory income for all insured persons becomes EUR 2,352.

During the debate on the state financial framework, Finance Minister Temenuzhka Petkova stated that the 2026 budget is based on the effective legislation; according to the opposition, it is a risky budget and is conducive to bankruptcy. Calls for protests were heard.

"This is a budget for Bulgarian citizens. It is not a piggy bank for those in power, it is a piggy bank for the people themselves, because it includes a minimum wage of EUR 620, something we have never had, and pensions have been increased under the so-called Swiss rule," Deputy Prime Minister and Transport and Communications Minister Grozdan Karadjov said during the debate. "The inertia of the previous left-wing budgets is so great that it will be very difficult to make a turn," he said in response to opposition accusations of a leftist budget. "We have higher maternity benefits, higher salaries for teachers, doctors, nurses, is this what they believe wrong with this budget?" asked Karadjov. He added that EUR 920 million are allocated for municipalities. "I am not saying that the dividend tax or the two-percentage-point increase in social-security contributions are good measures - every increase hurts someone - but this is the least harmful of all possible scenarios," he added.

Regional Development Minister Ivan Ivanov said that the proposed budget framework is dictated by delays and unrealized investments in infrastructure over the past four years. According to him, each delay in construction "comes back as a heavier and significantly more expensive commitment". "This means the government has less ability to pursue its own vision," the minister explained. Ivanov added that this government inherited inadequate road infrastructure maintenance but is determined to ensure "normal roads".

On Thursday, the plenary chamber also approved on first reading the draft budgets for next year of the NHIF and the PSI.

The NHIF draft budget provides a total of EUR 260 million for remuneration of employees in medical establishments. Of this amount, EUR 230 million is for the personnel in medical establishments, and EUR 30 million for medical establishments funded by the Ministry of Health. The health insurance contribution for 2026 remains 8%. The NHIF reserve is around 3% of the budget - EUR 155,892,700 - which represents an increase of 9.8%, explained NHIF Chair Petko Stefanovski.

Revenues and transfers are projected at EUR 5,571,998,400. Health-insurance revenues amount to EUR 5,196,424,800, of which EUR 3,177,034,800 come from health-insurance contributions and EUR 2,019,390,000 are transfers for health insurance paid from the state budget (for certain categories of public servants). Total planned expenditures for next year amount to EUR 5,571,998,400. Revenues and expenditures under the bill are EUR 727,652,900 euro higher than in 2025, a 15% increase.

Next year’s NHIF budget creates a stable financial foundation, said Health Minister Silvi Kirilov while presenting the parameters.

No reforms are envisaged, the opposition argued.

The draft 2026 PSI budget provides for the pension contributions to increase by 2 percentage points. The minimum contributory income for self-insured persons as of January 1, 2026 is set at EUR 620.20, and the maximum for all insured persons at EUR 2,352.

The benefit for raising a child up to two years of age, as well as for raising a child up to eight years of age by the father (or adoptive parent), increases from EUR 398.81 to EUR 460.17. The benefits for unused maternity leave, for adoption of a child up to five years old, and for raising a child up to two years old will increase from 50% to 75% of the compensation received during the leave. Pensions for work will be updated as of July 1, 2026 under the so-called Swiss rule and estimates are that the increase will be 7% to 8%.

The opposition described the 2026 PSI draft budget as "leftist" and "pro-inflationary" and demanded that the increase in pension contributions be dropped.

BSP–United Left and MRF–New Beginning spoke up for the draft budget, stating that it guarantees and progressively builds on the social-security rights of Bulgarian citizens.

"There may well be a better budget, but this is the possible budget," commented Labour and Social Policy Minister Borislav Gutsanov.