EU Pursues Disciplinary Steps Against Bulgaria Over Excessive Budget Deficit
European Commission Actions and Bulgaria's Fiscal Situation
Commission Proposal for Disciplinary Action
SOFIA, June 3 (Reuters) - The European Commission proposed on Wednesday opening a disciplinary action against Bulgaria for running a budget deficit beyond limits set under EU rules.
Government Statements on Budget Deficit
Finance Minister's Warning
Speaking before the Commission's announcement, Finance Minister Galab Donev said Bulgaria's budget deficit was likely to hit 7.4% of gross domestic product this year, adding that this would trigger disciplinary steps by the European Union.
Historical Deficit Trends
Donev said previous governments had successively reported annual deficits of 3% of GDP over the last five years by deferring certain payments.
Recent Political and Economic Developments
Euro Zone Entry and Political Changes
• Bulgaria joined the euro zone in January and a new government headed by Prime Minister Rumen Radev, the country's former president, took power after winning a landslide victory in a parliamentary election on April 19.
European Commission's Latest Report
• In its latest report on Bulgaria published in May, the European Commission said the government deficit was set to exceed 4% of GDP in 2026 and 2027.
Measures and Consequences
Proposed Fiscal Measures
• Donev said the government would need to take measures, including freezing incomes and cutting state spending, to help bring the deficit within EU limits.
EU Disciplinary Procedure
Deadlines and Fiscal Requirements
• Countries under this procedure are given deadlines and sets of fiscal measures to bring their finances back into line. If they fail to act, the EU can issue warnings and, for euro zone members, impose financial sanctions such as fines.
(Reporting by Alex Lefkowitz; Writing by Angeliki KoutantouEditing by Gareth Jones)
