site.btaBulgaria to Request Rearmament Projects under EU Initiatives to Be Excluded from State Budget Deficit

The Bulgarian Government will request the activation of a national derogation clause from the European Commission to allow defence investments without affecting budgetary rules, Prime Minister Rosen Zhelyazkov told journalists in Stara Zagora (central Bulgaria) on Monday. Zhelyazkov, together with the President of the European Council, Antonio Costa, visited Trakia University in the city.

Zhelyazkov said that a decision to this effect will be adopted this week at the regular meeting of the Council of Ministers. With this national derogation clause, defense spending within the framework of the deficit criteria established will be excluded, as the provision on derogation from the Stability and Growth Pact foresees, he said. He reminded journalists that Bulgaria was one of the countries that proposed this option.

“This year, defence spending is over 2% of the gross domestic product, and the Government's intention is to increase the expenditure, taking advantage of the opportunity to activate the clause for excluding the rearmament projects that are implemented under the European Union's initiatives for joint acquisition from the State Budget deficit ,” the Prime Minister said. According to him, through this derogation and the coordinated activation of the national clause, Bulgaria has the opportunity to invest more in defence, provided that this does not threaten fiscal stability. "These investments will amount to up to 1.5% of GDP on an annual basis, with the reference year being the year before the war in Ukraine," the Prime Minister said, adding that this applies to a period of 4 years.

As formulated by the European Commission, activating this clause will provide an exception to complying with the Union’s budgetary rules, which will allow defence-related expenditures, up to the limit of 1.5% of GDP, not being counted against the limits imposed by the net primary expenditure ceilings.

Prime Minister Zhelyazkov and European Council President Antonio Costa visited the Aquaponics Centre at Trakia University in Stara Zagora – a unique educational, research and industrial project dedicated to ecological production in a controlled environment. Earlier in the day, the two also visited the Arsenal military plant in Kazanlak as part of efforts to demonstrate the potential of the Bulgarian defence industry.