Recommendation for a COUNCIL DECISION abrogating Decision 2010/422/EU on the existence of an excessive deficit in Bulgaria
Date: 2012-05-30
Institutions: European Commission
Subjects: Bulgaria, budget deficit, budget estimate, economic recession, public debt, stability pact

EUROPEAN COMMISSION 

Brussels, 30.5.2012  
COM(2012) 273 final 

Recommendation for a 

COUNCIL DECISION 

abrogating Decision 2010/422/EU on the existence of an excessive deficit in Bulgaria 

EN 

   EN 

 
 
 
  
 
Recommendation for a 

COUNCIL DECISION 

abrogating Decision 2010/422/EU on the existence of an excessive deficit in Bulgaria 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 126(12) thereof, 

Having regard to the recommendation from the Commission, 

Whereas:  

(1) 

(2) 

(3) 

By  Council  Decision  2010/422/EU  of  13  July  20101,  following  a  proposal  from  the 
Commission  in  accordance  with  Article 126(6)  of  the  Treaty,  it  was  decided  that  an 
excessive deficit existed in Bulgaria. The Council noted that the general government 
deficit reached 3.9% of GDP in 2009, above the 3% of GDP Treaty reference value, 
while the general government gross debt was 14.8% of GDP, well below the 60% of 
GDP Treaty reference value2.  

On 13 July 2010, in accordance with Article 126(7) of the Treaty and Article 3(4) of 
Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the 
implementation  of  the  excessive  deficit  procedure3,  the  Council,  based  on  a 
recommendation from the Commission, addressed a recommendation to Bulgaria with 
a view to bringing the excessive deficit situation to an end by 2011 at the latest. The 
recommendation was made public. 

In  accordance  with  Article  4  of  the  Protocol  on  the  excessive  deficit  procedure 
annexed to the Treaties, the Commission provides the data for the implementation of 
the procedure. As part of the application of this Protocol, Member States are to notify 
data  on  government  deficits  and  debt  and  other  associated  variables  twice  a  year, 
namely before 1 April and before 1 October, in accordance with Article 3 of Council 
Regulation (EC) No 479/2009 of 25 May 2009 on the application of the Protocol on 
the  excessive  deficit  procedure  annexed  to  the  Treaty  establishing  the  European 
Community4.  

1 
2 

3 
4 

OJ L 199, 31.7.2010, p. 26. 
The general government deficit and debt for 2009 were subsequently revised to currently 4.3% of GDP 
and 14.6% of GDP respectively. 
OJ L 209, 2.8.1997, p. 6.  
OJ L 145, 10.6.2009, p. 1.  

EN 

2 

   EN 

 
 
                                                 
(4)  When considering whether a decision on the existence of an excessive deficit should 
be  abrogated,  the  Council  should  take  a  decision  on  the  basis  of  notified  data. 
Moreover, a decision on the existence of an excessive deficit should be abrogated only 
if  the  Commission  forecasts  indicate  that the  deficit  will  not  exceed  the  3%  of  GDP 
threshold over the forecast horizon5. 

(5) 

Based on data provided by the Commission (Eurostat) in accordance with Article 14 
of Regulation (EC) No 479/2009 following the notification by Bulgaria before 1 April 
2012 and on the Commission services’ 2012 spring forecast, the following conclusions 
are warranted: 

– 

– 

– 

The  budgetary  targets  have  been  consistently  overachieved  in  the  period 
following the year of the excessive deficit. The general government deficit was 
reduced  to  3.1%  of  GDP  in  2010  and  decreased  further  to  2.1%  of  GDP  in 
2011, against initially set targets of 3.8% and 2.5% respectively. The correction 
of  the  deficit  has  been  driven  mainly  by  strict  control  of  expenditure  growth, 
including  through  freezing  the  government  sector  wage  bill  and  pensions, 
whereby  the  expenditure-to-GDP  ratio  fell  by  5.5  percentage  points  between 
2009  and  2011.  The  2012  convergence  programme  projects  the  deficit  to 
continue  falling  to  1.6%  of  GDP  in  2012  and  1.3%  of  GDP  in  2013.  In  the 
Commission  services'  2012  spring  forecast  the  general  government  deficit  is 
projected  to  improve  to  1.9%  of  GDP  in  2012  and  to  1.7%  of  GDP  in  2013, 
supported by a continued freeze in the government sector wage bill, as well as 
a cyclical improvement in revenues.  

The  Commission  services'  2012  spring  forecast  projects  a  cyclically  adjusted 
balance net of one-off and temporary measures of 0.7% in 2012 and of 0.8% of 
GDP in 2013, under a no-policy-change assumption. Meanwhile, in 2012 and 
2013, the growth rate of government expenditure net of discretionary revenue 
measures  is  forecast  to  remain  below  the  benchmark  reference  medium-term 
rate  of  potential  GDP  growth,  as  specified  in  Article  5(1)  of  Council 
Regulation  (EC)  No  1466/97  of  7  July  1997  on  the  strengthening  of  the 
surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of 
economic policies. 

The  Commission  services'  2012  spring  forecast  projects 
the  general 
government gross debt to increase moderately from 16.3% of GDP in 2011 to 
18.5%  of  GDP  in  2013.  This  debt  forecast  does  not  include  possible  external 
debt issuance in 2012 to pre-fund the repayment of euro-denominated bonds of 
around  2%  of  GDP  in  January  2013.  Similarly,  the  latest  convergence 
programme projects the debt ratio to increase to 18.4% by 2013. 

(6) 

In accordance with Article 126(12) of the Treaty, a Council Decision on the existence 
of  an  excessive  deficit  is  to  be  abrogated  when  the  excessive  deficit  in  the  Member 
State concerned has, in the view of the Council, been corrected.  

5 

In line with the “Specifications on the implementation of the Stability and Growth Pact and Guidelines 
on the format and content of Stability and Convergence Programmes”, as agreed by the Council on 24 
January 2012. See: 
http://ec.europa.eu/economy_finance/economic_governance/sgp/pdf/coc/code_of_conduct_en.pdf 

EN 

3 

   EN 

                                                 
 
(7) 

In  the  view  of  the  Council,  the  excessive  deficit  in  Bulgaria  has  been  corrected  and 
Decision 2010/422/EU should therefore be abrogated. 

HAS ADOPTED THIS DECISION: 

From an overall assessment it follows that the excessive deficit situation in Bulgaria has been 
corrected. 

Article 1 

Decision 2010/422/EU is hereby abrogated. 

Article 2 

Article 3 

This Decision is addressed to the Republic of Bulgaria. 

Done at Brussels, 

For the Council 
The President 

EN 

4 

   EN