- Council Decision (EU) 2026/1758 of 10 July 2026 finds an excessive deficit in Bulgaria.
- Bulgaria's government deficit was 3.5% of GDP in 2025 and is projected at 4.1% in 2026.
- The national escape clause for defence spending (2025–2028) covers only the 2025 excess.
- Government debt at 29.9% of GDP is below the 60% reference value; the debt criterion is met.
- The deficit is projected to remain above 3% of GDP in 2027 as well.
Binding Council decision on excessive deficit
The Council of the European Union has adopted Council Decision (EU) 2026/1758 of 10 July 2026, finding that an excessive deficit exists in Bulgaria due to non-compliance with the deficit criterion of the Stability and Growth Pact. The decision is taken on the basis of Article 126(6) of the Treaty on the Functioning of the European Union (TFEU) and follows the European Commission's opinion of 25 June 2026.
Budget deficit well above the 3% threshold
According to Eurostat data published on 22 April 2026, Bulgaria's general government deficit reached 3.5% of GDP in 2025. The Commission's Spring 2026 Forecast projects a 2026 deficit of 4.1% of GDP. Both figures clearly exceed the Treaty reference value of 3% of GDP, and the excess is not considered temporary. The Spring Forecast further indicates that the deficit is projected to remain above 3% of GDP in 2027 as well.
| Indicator | Value | Reference value |
|---|---|---|
| Government deficit 2025 | 3.5% of GDP | 3% of GDP |
| Projected deficit 2026 | 4.1% of GDP | 3% of GDP |
| Projected deficit 2027 | Above 3% of GDP | 3% of GDP |
| Government debt 2025 | 29.9% of GDP | 60% of GDP |
Defence spending and the national escape clause
A central element of the case is that the Council activated the national escape clause on 8 July 2025 to allow increased defence expenditure in Bulgaria during the 2025–2028 period. Under the Council Recommendation of 8 July 2025, Bulgaria was permitted to deviate from the maximum growth rates of net expenditure set by the Council.
The Commission's report under Article 126(3) TFEU assessed that the 2025 excess over the 3% threshold could be considered exceptional, as it could be fully explained by the increase in defence spending since the reference year 2024. For the 2026 projection, however, the excess cannot be fully explained by defence expenditure, and the escape clause in Article 2(5) of Council Regulation (EC) No 1467/97 therefore does not apply.
Debt criterion met
On the debt side, the picture is more favourable. General government debt stood at 29.9% of GDP in 2025, well below the Treaty reference value of 60% of GDP. The debt criterion is therefore fulfilled, and the decision rests exclusively on the deficit criterion.
Relevant factors aggravate the assessment
The Commission also assessed all relevant factors in its Article 126(3) TFEU report, including economic growth, the capacity to reduce debt, and the financial sector's condition. Overall, the relevant factors are assessed as aggravating for Bulgaria. Given that the deficit is rising to well above 3% of GDP in 2026, the deficit criterion as defined by the Treaty and Council Regulation (EC) No 1467/97 is not met.
Legal basis and procedure
The decision follows a multi-step process: the Commission first produces a report under Article 126(3) TFEU; the Economic and Financial Committee delivers its opinion; the Commission addresses an opinion to the Member State (in this case on 25 June 2026); and the Council takes its decision following an overall assessment of any observations from the Member State. All documents related to the excessive deficit procedure for Bulgaria are available on the Commission's website.
The decision, adopted in Brussels on 10 July 2026, is signed by the Council President S. Harris and is addressed to the Republic of Bulgaria.