Bulgaria to be penalized for deficit just months after joining the eurozone - FT
Kyiv • UNN
The European Commission will initiate a procedure against Sofia due to a budget deficit of 3.5%. Experts forecast the figure will continue to rise to 4.3% in 2027.
Bulgaria will be punished next week for violating budget rules just months after joining the eurozone, putting Prime Minister Rumen Radev's government on a collision course with Brussels, the Financial Times reports, according to UNN.
Details
According to officials, the European Commission will launch a so-called excessive deficit procedure against Sofia, as its annual deficit rose to 3.5% last year, exceeding the eurozone's 3% threshold.
The move, which carries market stigma and potentially higher borrowing costs, is expected to increase tensions with Radev, who previously served as president and has become increasingly critical of the EU and the US since coming to power in April on a pro-Russian platform.
According to a recent European Commission forecast, Bulgaria's deficit will grow even further in the coming years to 4.1% next year and 4.3% in 2027.
"This year the deficit will be even larger. The bubble has burst," Radev said at a government meeting on Friday. "This is the result of the difficult legacy we [inherited]."
Ten other countries are under such a procedure, including Italy and France. Other countries with projected deficits exceeding 3 percent — including Germany — will not fall under the excessive deficit procedure this year thanks to a clause that exempts certain defense-related expenditures.