Budget Committee Approves Raising of Government Debt Ceiling to EUR 3.8 Bln on Second Reading

Dimitrina Solakova, Мartin Lekov

The parliamentary Budget and Finance Committee in session, Sofia, June 16, 2026 (BTA Photo/Minko Chernev)

Sofia,

16.06.2026 14:21

(BTA)

The parliamentary Budget and Finance Committee Tuesday approved on second reading a raise of the new debt ceiling to EUR 3.8 billion through amendments to the so-called budget extension law (formally 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). The bill stipulates that the Council of Ministers has the authority to incur new public debt of up to 3% of projected GDP.

The bill provides for the government to issue new debt on international capital markets through the medium-term programme for issuing debt on international markets, as well as short-term government debt, which is to be repaid by the end of the current fiscal year.

The bill's sponsors from the Council of Ministers note that raising the debt ceiling is related to the need to secure resources for pre-financing payments to implement national activities/investments in the final stage of project implementation under the National Recovery and Resilience Plan, as well as in view of the sudden and unexpected change in the geopolitical situation and rising energy prices, which are having a negative impact on the budget’s liquidity position and further burdening its expenditures.

Deputy Minister of Finance Lyudmila Petkova said that the situation regarding budget expenditures is expected to be critical in August and September, given the monthly costs of all social payments in the country, which is why this debt is necessary. She further stated that it is imperative to approve this amendment to the law, as August is not a suitable time to take on debt given that activity in international markets is subdued.

/RY/