site.btaBudget and Finance Committee Approves Amendments Allowing Cabinet to Raise Up to EUR 3.8 Bln in New Public Debt

Bulgaria's parliamentary Committee on Budget and Finance Tuesday voted, 13-3 with five abstentions, to approve on first reading amendments to the Act on the Collection of Revenues and the Commitment of Expenditures in 2026 until the Passage of the 2026 State Budget Act, the 2026 Public Social Insurance Budget Act and the 2026 National Health Insurance Fund Budget Act. Submitted by the Council of Ministers, the revisions would authorize the government to incur up to EUR 3.8 billion in new public debt to finance the budget deficit, including pre-financing under the Recovery and Resilience Plan.

Presenting the draft legislation, Deputy Prime Minister and Finance Minister Galab Donev noted that, in previous years, largely similar provisions governing the collection of revenues, the commitment of expenditures, and transfers had been applied when the state budget had not been adopted before the start of the fiscal year. He said that the 2026 legislation differs from earlier budget extension laws in that it includes an explicit provision authorizing the government to raise public debt, including short-term borrowing if necessary, to ensure sufficient funding for the current budget deficit and to provide pre-financing for national activities and investments during the final stage of projects implemented under the National Recovery and Resilience Plan.

This will ensure that sufficient resources are available for the national budget to pre-finance the substantial payments due in 2026 under the National Recovery and Resilience Plan, Donev said.

The amendments to the law allows the Council of Ministers to issue new debt on international capital markets under the medium-term international debt issuance programme, as well as short-term government debt of up to EUR 3.8 billion, which must be repaid by the end of the current fiscal year.

The amendments also authorize the Council of Ministers to negotiate and conclude an agreement with the European Commission for a EUR 3.2617 billion loan under the Security Action for Europe (SAFE) instrument, aimed at strengthening the European defence industry. The agreement will be subject to subsequent ratification.