The government in Sofia announced on Friday that, next week, the European Commission will open an excessive deficit procedure against Bulgaria, which recorded a deficit of 3.5% of GDP in 2025 and this year would record a deficit of 4% of GDP, reports EFE, taken over by Agerpres.
“I have bad news from Brussels: next week, on June 3, the European Commission will announce that Bulgaria will enter an excessive deficit procedure and that we will be subject to the supervision of public finances”, announced Prime Minister Rumen Radev, at the meeting of the Council of Ministers.
Radev met on Thursday with the President of the European Commission, Ursula von der Leyen, in his first visit to Brussels since winning the elections on April 19, the eighth election held in the last five years.
On May 21, the European Commission reported that Bulgaria recorded a deficit of 3.5% of GDP in 2025 and that it is expected to increase to 4.1% of GDP this year and 4.3% of GDP next year, exceeding the 3% threshold set by the EU's Stability and Growth Pact.
Bulgaria, the highest inflation in the euro area
The spring forecast estimated by the EC comes in the context in which the country also faces the highest inflation rate in the euro area, which is already causing food prices to rise, according to Euractiv.
Bulgaria joined the eurozone on January 1, 2026, after meeting the criteria for inflation, monetary stability, debt and deficit, which in 2024 was 3.1% of GDP, just above the 3% threshold required for eurozone membership.
Under the EU's excessive deficit procedure, countries that breach the bloc's fiscal rules are required to reduce their deficit below 3% of GDP within a set time frame and are subject to stricter budgetary monitoring by the European Commission.
If confirmed, Bulgaria would become the first country to enter the euro zone and face the bloc's fiscal remedies within months of joining. It would also be the first excessive deficit procedure for Sofia since the closure of the previous procedure in 2012.
Higher borrowing costs
The move, which comes with negative investor or financial market perceptions and potentially higher borrowing costs, is expected to intensify 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, the Financial Times comments.
The Commission declined to comment ahead of the publication of the European Semester package next week.
“The Commission will present its assessment in the context of the European Semester next week and will not comment further at this stage,” a spokesperson told Euractiv.
The long-awaited excessive deficit procedure comes days after Brussels released 370 million euros of frozen Bulgarian Recovery Fund funds, but kept another 3 billion euros on hold until judicial and anti-corruption reforms are completed.
Radev accuses the previous governments
In 2025, while he was still president of Bulgaria, Radev proposed holding a referendum on the country's entry into the eurozone, arguing that Bulgaria was not ready.
In his speech on Friday, the head of government accused previous governments (eight in five years) of manipulating economic data. “Now comes the time for difficult questions, and the European Commission will ask why some lied,” stressed Radev.
The previous government in Sofia claimed at the end of its term this month that the 3.5% deficit of GDP for 2025 also includes half a percentage point in defense spending, which will not be counted when deciding whether the country has exceeded the spending limit.
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