site.btaEC to Propose Opening Excessive Deficit Procedure for Bulgaria, Commissioner Dombrovskis Says

The European Commission (EC) will now propose to open an excessive deficit procedure (EDP) for Bulgaria, EU Commissioner for Economy and Productivity Valdis Dombrovskis said at the Economic and Financial Affairs Council (ECOFIN) press conference on Friday, following a meeting of European finance ministers in Luxembourg.

Following the opinion of the Economic and Financial Committee (EFC), the EC assessed the compliance of several Member States with the Treaty's deficit criterion and found that Bulgaria was not compliant, Dombrovskis added.

On June 3, the Commission assessed that such a procedure could be initiated after an assessment of the EFC. The EC reported that Bulgaria's consolidated government budget deficit amounts to 3.5% of GDP in 2025, and is expected to increase further and remain above 4% through 2027, partly due to planned defence spending. The Commission issued five recommendations for our country, including increasing defence spending, combating the "grey" economy and reforming the tax system, accelerating digitalization, enhancing the independence of regulators, phasing out fossil fuel subsidies, and improving the healthcare system.

EXCESSIVE DEFICIT PROCEDURE

The EDP is a mechanism designed to ensure that EU Member States return to or maintain discipline in their governments' budgets. To limit government deficit and debt, Member States have agreed reference values, which they have enshrined in the EU treaties: a 3% deficit ratio and a 60% debt ratio.

If a member state exceeds or is at risk of exceeding the reference values for deficit or debt, the Commission prepares a report in which it analyses whether the member state concerned is running an excessive deficit. If the Commission believes that an EDP is warranted for a member state, it informs the Council accordingly and proposes that the latter adopt a decision establishing that there is an excessive deficit in the member state concerned. If the Council has concluded that, then it adopts a recommendation and specifies the necessary steps. The recommendation may include a corrective budgetary plan and a deadline. The member state concerned must take the necessary action within six months.

If no effective action is taken by the deadline, or if the country fails to comply with the recommendation, the Council may impose sanctions, including a fine of up to 0.05% of the previous year's GDP if the affected country is part of the eurozone. The fine must be paid every six months until the Council determines that the country has taken effective action. If the country continues to fail to meet its obligations, the Council has the right to increase the sanctions.

Council decisions and recommendations are adopted under specific voting rules. The member state concerned does not have a vote. 

Bulgaria was subject to the same procedure in July 2010, and in June 2012, the Council determined that the grounds for the procedure no longer existed and the enhanced monitoring was terminated.