Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of Bulgaria
Date: 2025-05-12
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Bulgaria, budget deficit, coordination of EMU policies, economic reform, fiscal policy, investment, macroeconomics, national planning, public debt, structural adjustment

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   EUROPEAN COMMISSION  Brussels, 12.5.2025  COM(2025) 238 final  Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of Bulgaria  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

endorsing the national medium-term fiscal-structural plan of Bulgaria 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 121 thereof, 

Having regard to Regulation (EU) 2024/1263, and in particular Article 17 thereof, 

Having regard to the recommendation from the Commission, 

Whereas: 

GENERAL CONSIDERATIONS 

(1) 

(2) 

A reformed EU economic governance framework entered into force on 30 April 2024. 
Regulation  (EU)  2024/1263  of  the  European  Parliament  and  of  the  Council  on  the 
effective  coordination  of  economic  policies  and  on  multilateral  budgetary 
surveillance1,    together  with  the  amended  Regulation  (EC)  No  1467/97  on  the 
implementation  of  the  excessive  deficit  procedure2,  and  the  amended  Council 
Directive  2011/85/EU  on  the  budgetary  frameworks  of  Member  States3  are  the  core 
elements of the reformed EU economic governance framework. The framework aims 
at  ensuring  public  debt  sustainability  and  sustainable  and  inclusive  growth  through 
reforms  and  investments.  It  promotes  national  ownership  and  has  a  medium-term 
focus, combined with an effective and coherent enforcement of the rules.  

The  national  medium-term  fiscal-structural  plans  that  Member  States  submit  to  the 
Council  and  to  the  Commission  are  at  the  centre  of  the  new  economic  governance 
framework. The plans are to deliver on two objectives: i) ensuring that, by the end of 
the adjustment period, general government debt is on a plausibly downward trajectory, 
or stays at  prudent  levels,  and that the government  deficit is  brought and maintained 
below the reference value of 3% of GDP over the medium term, and ii) ensuring the 
delivery  of  reforms  and  investments  responding  to  the  main  challenges  identified  in 
the context of the European Semester and addressing the common priorities of the EU. 

L, 

No 

(EC) 

1466/97 

1 
  Regulation  (EU)  2024/1263 of  the  European  Parliament  and of  the  Council  of 29  April  2024  on  the 
effective  coordination  of  economic  policies  and  on  multilateral  budgetary  surveillance  and  repealing  Council 
Regulation 
ELI: 
(OJ 
http://data.europa.eu/eli/reg/2024/1263/oj).Regulation  (EU)  2024/1263  of  the  European  Parliament  and  of  the 
Council  of  29  April  2024  on  the  effective  coordination  of  economic  policies  and  on  multilateral  budgetary 
surveillance  and  repealing  Council  Regulation  (EC)  No  1466/97  (OJ  L,  2024/1263,  30.4.2024,  ELI: 
http://data.europa.eu/eli/reg/2024/1263/oj). 
2 
Council  Regulation  (EU)  2024/1264  of  29  April  2024  amending  Regulation  (EC)  No  1467/97  on 
speeding up and clarifying the implementation of the excessive deficit procedure (OJ L, 2024/1264, 30.4.2024, 
ELI: http://data.europa.eu/eli/reg/2024/1264/oj). 
3 
for 
http://data.europa.eu/eli/dir/2024/1265/oj). 

Council Directive (EU) 2024/1265 of 29 April 2024 amending Directive 2011/85/EU on requirements 
30.4.2024,  ELI: 

the  Member  States 

frameworks 

2024/1265, 

2024/1263, 

30.4.2024, 

budgetary 

(OJ  L, 

of 

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To that end, each plan is to present a medium-term commitment to a net expenditure4 
path, which effectively establishes a budgetary constraint for the duration of the plan, 
covering four or five years (depending on the regular term of legislature in a Member 
State).  In  addition,  the  plan  is  to  explain  how  the  Member  State  will  ensure  the 
delivery  of  reforms  and  investments  responding  to  the  main  challenges  identified  in 
the  context  of  the  European  Semester,  in  particular  in  the  country-specific 
recommendations  (including  those  pertaining  to  the  macroeconomic  imbalances 
procedure (MIP), if applicable), and how the Member State will address the common 
priorities of the Union. The period for fiscal adjustment covers a period of four years, 
which  may  be  extended  by  up  to  three  years  if  the  Member  State  commits  to 
delivering a set of relevant reforms and investments that satisfies the criteria set out in 
Regulation (EU) 2024/1263.  

(3) 

(4) 

Following the submission of the plan, the Commission is to assess whether it complies 
with the requirements of Regulation (EU) 2024/1263.  

Upon  a  recommendation  from  the  Commission,  the  Council  is  to  then  adopt  a 
recommendation to set the net  expenditure path  of the Member State concerned and, 
where  applicable,  endorses 
investment  commitments 
the  set  of  reform  and 
underpinning an extension of the fiscal adjustment period.  

CONSIDERATIONS  CONCERNING  THE  NATIONAL  MEDIUM-TERM  FISCAL-
STRUCTURAL PLAN OF BULGARIA 

(5) 

On  27  February  2025,  Bulgaria  submitted  its  national  medium-term  fiscal  structural 
plan  to  the  Council  and  the  Commission.  The  submission  took  place  following  two 
extensions  of  the  deadline  set  out  in  Article  36  of  Regulation  (EU)  2024/1263,  as 
agreed with the Commission in view of the reasons provided by Bulgaria, namely the 
need  to  align  the  timing  of  submission  with  the  political  cycle,  which  would  give 
Bulgaria the possibility to present a plan based on a solid political commitment.  

Process prior to the submission of the plan 

(6) 

Prior  to  the  submission  of  its  plan,  Bulgaria  requested  technical  information5,  which 
the Commission provided on 24 January 2025, and published on 27 February 20256. 
The technical information indicates the level of the structural primary balance in 2028 

4 
Net expenditure as defined in Article 2 of Regulation (EU) 2024/1263, namely government expenditure 
net of (i) interest expenditure, (ii) discretionary revenue measures, (iii) expenditure on Union programmes fully 
matched by revenue from Union funds, (iv) national expenditure on co-financing of programmes funded by the 
Union,  (v)  cyclical  elements  of  unemployment  benefit  expenditure  and  (vi)  one-offs  and  other  temporary 
measures. 
5 
Prior  guidance  transmitted  to  the  Member  States  and  Economic  and  Financial  Committee  includes 
technical  information  i)  without  and  with  an  extension  of  the  adjustment  period  (covering  4  and  7  years, 
respectively), and ii) with and without the deficit resilience safeguard. It also includes the main initial conditions 
and  underlying  assumptions  used  in  the  Commission’s  medium-term  government  debt  projection  framework. 
The technical information was calculated on the basis of the methodology described in the Commission’s  Debt 
Sustainability  Monitor  2023  (https://economy-finance.ec.europa.eu/publications/debt-sustainability-monitor-
2023_en). It is based on the European Commission Autumn 2024 Forecast and its medium-term extension up to 
2033, and long-term GDP growth and ageing costs are in line with the joint Commission-Council 2024 Ageing 
Report 
(https://economy-finance.ec.europa.eu/publications/2024-ageing-report-economic-and-budgetary-
projections-eu-member-states-2022-2070_en). 
6 
pact/preventive-arm/national-medium-term-fiscal-structural-plans_en#bulgaria 

https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-

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that is necessary to ensure that the general government deficit is maintained below 3% 
of  GDP  over  the  medium  term  and  that  the  general  government  debt  remains  below 
60% of GDP over the medium term, even in the absence of further budgetary measures 
beyond  the  4-year  adjustment  period.  The  medium  term  is  defined  as  the  ten-year 
period after the end of the adjustment period. The technical information was prepared 
and  transmitted  to  the  Member  States  under  two  scenarios:  a  scenario  including 
consistency  with  the  deficit  resilience  safeguard,  in  line  with  Article  9(3)  of 
Regulation  (EU)  2024/126,  and  a  scenario  without  this  safeguard.  The  technical 
information  for  Bulgaria  sets  out  that,  in  order  to  comply  with  the  applicable  fiscal 
rules  over  an  adjustment  period  of  4  years,  and  based  on  the  Commission’s 
assumptions, the structural primary balance should amount to at least 2.1% of GDP at 
the end of the adjustment period (2028) in  the  scenario without the deficit  resilience 
safeguard,  as  per  the  following  table.  For  information,  considering  also  the  deficit 
resilience safeguard, the structural primary balance would amount to at least 0.9% of 
GDP  at  the  end  of  the  adjustment  period  (2028).  However,  the  deficit  resilience 
safeguard is not a requirement for Bulgaria. 

Table 1: Technical information provided by the Commission to Bulgaria 

Final year of the adjustment period 

Minimum value of the structural primary balance (% of GDP), scenario without the 
deficit resilience safeguard 

For information only: Minimum value of the structural primary balance (% of GDP), 
scenario with the deficit resilience safeguard 

2028 

-2.1 

-0.9 

Source: Commission’s calculations. 

(7) 

(8) 

In line with Article 12 of Regulation (EU) 2024/1263, Bulgaria and the Commission 
engaged in a technical dialogue from September to October 2024 and from January to 
February  20257.  The  dialogue  centred  on  the  net  expenditure  path  envisaged  by 
Bulgaria and its underlying assumptions (in particular potential growth and inflation), 
as well as the envisaged delivery of reforms and investments responding to the main 
challenges  identified  in  the  context  of  the  European  Semester  and  the  common 
priorities  of  the  Union  in  a  fair  green  and  digital  transition,  social  and  economic 
resilience, energy security and the build-up of defence capabilities. 

In February 2025, in line with Article 11(3) and 36(1), point (c), of Regulation (EU) 
2024/1263,  according  to  the  information  provided  by  Bulgaria  in  its  plan,  Bulgaria 
engaged  in  a  consultation  process  with  civil  society,  social  partners,  regional 
authorities and other relevant stakeholders. According to the information provided by 
Bulgaria in its plan, the plan was consulted with a broad set of stakeholders, ranging 
from  social  partners 
to  representatives  of  civil  society,  academia,  business 
organisations and non-governmental organisations. 

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The dialogue was paused to align the  timing of  the  submission of  the plan with the political 

cycle and give Bulgaria the possibility to present a plan based on a solid political commitment. 

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(9) 

The  plan  was  adopted  by  Bulgaria’s  Council  of  Ministers  on  26  February  2025  and 
sent to the National Assembly of the Republic of Bulgaria. 

Other related processes 

(10)  On  21  October  2024,  the  Council  addressed  to  Bulgaria  a  series  of  country-specific 

recommendations (CSRs) in the context of the European Semester8. 

(11)  On  25  February  2025,  Bulgaria  submitted  a  request  for  a  convergence  assessment 
under Article 140(1) TFEU with a view to possible entry in the euro area on 1 January 
2026.  The  assessment  by  the  Commission,  published  on  4  June  2025,  also  took  into 
account the public finance criterion. 

(12)  On  02  May  2025,  Bulgaria  requested  the  activation  of  the  national  escape  clause  to 
accommodate  higher  defence  spending,  in  accordance  with  Article  26  (1)  of 
Regulation  (EU)  2024/1263  and  following 
the  Commission  Communication 
(C(2025)2000 final) of 19 March 2025. 

SUMMARY  OF  THE  PLAN  AND  THE  COMMISSION’S  ASSESSMENT  OF 
THEREOF 

(13) 

In  line  with  Article  16  of  Regulation  (EU)  2024/1263,  the  Commission  assessed  the 
plan as follows: 

Context: macroeconomic and fiscal situation and outlook 

(14)  Economic activity in Bulgaria grew by 2.8% in 2024, driven by private consumption.  
According  to  the  European  Commission  Autumn  2024  Forecast,  real  GDP  is  set  to 
increase by 2.9% in 2025, as exports and public investment pick up. In 2026, real GDP 
is  expected  to  increase  by  3%,  as  investment  accelerates  further,  and  other  demand 
components maintain stable growth rates. Over the forecast horizon (i.e., 2025-2026), 
potential GDP growth in Bulgaria is expected to remain relatively strong, albeit on a 
declining  path,  driven  by  strong  investment,  partially  offset  by  adverse  demographic 
trends.  The  unemployment  rate  stood  at  4.2%  in  2024  and  is  projected  by  the 
Commission to amount to 4% in 2025 and 3.8% in 2026. Inflation (GDP deflator) is 
projected to decrease from 6.5% in 2024 to reach 2.3% in 2025 and 2.8% in 2026. 

(15)  Regarding  fiscal  developments,  in  2024  Bulgaria’s  general  government  deficit 
amounted  to  3%  of  GDP.  According  to  the  European  Commission  Autumn  2024 
Forecast, it is expected to reach 2.8% of GDP in 2025 and, under a no-policy change 
assumption,  to  remain  at  2.8%  in  2026.  The  European  Commission  Autumn  2024 
Forecast  did  not  include  Bulgaria’s  draft  budget  for  2025,  which  the  National 
Assembly adopted on 21 March 2025. General government debt was 24.1% of GDP at 
end-2024.  According  to  the  European  Commission  Autumn  2024  Forecast,  the  debt 
ratio is expected to decline to 23.1% of GDP at end-2025 and go back up to 24.5% at 
end-2026.  The  fiscal  forecast  by  the  Commission  does  not  consider  the  policy 

8 
budgetary policies of Bulgaria, OJ C C/2024/6809, 29.11.2024.  

Council  Recommendation  of  21  October  2024  on  the  economic,  social,  employment,  structural  and 

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commitments in the medium-term plans as such until they are underpinned by credibly 
announced and sufficiently specified concrete policy measures.  

Net expenditure path and main macroeconomic assumptions in the plan  

(16)  Bulgaria’s  national  medium-term  fiscal-structural  plan  covers  the  period  2025-2028 

and presents a fiscal adjustment over four years.   

(17)  The  plan  contains  all  information  required  by  Article  13  of  Regulation  (EU) 

2024/1263. 

(18)  The plan commits  to the  net  expenditure path  indicated in  Table  2,  corresponding to 
average  net  expenditure  growth  of  4.9%  over  the  years  2025-2028.    The  technical 
information  (assuming  a  linear  adjustment  path)  is  consistent  with  an  average  net 
expenditure  growth  of  5.1%  over  the  adjustment  period  2025-2028.  The  net 
expenditure  path  committed  to  in  the  plan  is  reported  to  lead  to  a  structural  primary 
balance  of  -1.8%  of  GDP  at  the  end  of  the  adjustment  period  (2028).  This  is  higher 
than  the  minimum  level  of  the  structural  primary  balance  of  -2.1%  of  GDP  in  2028 
provided by the Commission in the technical information on 24 January 20259.   

Table 2: Net expenditure path and main assumptions in Bulgaria’s plan  

2025 

2026 

2027 

2028 

Average 
over the 
period of 
validity of 
the plan 

2025-2028 

Net expenditure growth 
(annual, %) 

Net expenditure growth 
(cumulative, from base year 
2024, %) 

Potential GDP growth (%) 

Inflation (GDP deflator growth) 
(%) 

6.2 

4.9 

4.4 

4.0 

4.9 

6.2 

11.4 

16.3 

21.0 

n.a. 

2.8 

3.9 

2.6 

2.6 

2.5 

2.3 

2.4 

2.1 

2.6 

3.5 

Source: Medium-term fiscal-structural plan of Bulgaria and Commission calculations. 

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In the scenario without the deficit resilience safeguard. 

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Implications of the plan’s net expenditure commitments for general government debt  

(19) 

If the net  expenditure path  committed to  in  the plan and the underlying assumptions 
materialise, general government debt would, according to the plan, gradually increase 
over  the  adjustment  period  from  24.2%  in  2024  to  30.8%  of  GDP  at  the  end  of  the 
adjustment period, as per the following table. Over the medium term, which means 10 
years beyond the end of the adjustment period, this could imply a gradual increase in 
general government debt up to 45.3% in 2038. 

Table 3: General government debt and balance developments in Bulgaria’s plan  

2024 

2025 

2026 

2027 

2028 

2038 

Government debt 

24.2 

25.8 

27.4 

29.1 

30.8 

45.3 

(% of GDP) 

Government balance 

-3.0 

-3.0 

-2.9 

-2.9 

-2.9 

-2.9 

(% of GDP) 

(1) Source: Medium-term fiscal-structural plan of Bulgaria 

Thus,  according  to  the  plan,  general  government  debt  would  stay  well  below  the  Treaty 
reference value of 60% of GDP over the medium term. Therefore, based on the plan’s policy 
commitments  and  macroeconomic  assumptions,  the  net  expenditure  path  put  forward  in  the 
plan is consistent with the requirement for debt as set out in Article 16(2) of Regulation (EU) 
2024/1263.   

Implications  of  the  plan’s  net  expenditure  commitments  for  the  general  government 
balance 

(20)  Based  on  the  plan’s  net  expenditure  path  and  assumptions,  the  general  government 
deficit  would  slightly  decline  to  2.9%  of  GDP  over  the  adjustment  period.  Thus, 
according  to  the  plan,  the  general  government  balance  would  not  exceed  the  3%  of 
GDP reference value at the end of the adjustment period (2028). In addition, in the ten 
years following the adjustment period (i.e. until 2038), the government deficit would 
not  exceed  3%  of  GDP.  Therefore,  based  on  the  plan’s  policy  commitments  and 
macroeconomic  assumptions,  the  net  expenditure  path  put  forward  in  the  plan  is 
consistent with the requirement for the deficit as set out in Article 16(2) of Regulation 
(EU) 2024/1263.  

Macroeconomic assumptions of the plan 

(21)  The  plan  is  based  on  a  set  of  assumptions  which  differs  from  the  Commission’s 
assumptions transmitted to  Bulgaria on  24 January 2025.  In particular, the plan uses 
different  assumptions  for  six  variables,  namely  the  starting  point  for  the  structural 
primary  balance  in  2024,  potential  GDP  growth,  GDP  deflator  growth,  the  starting 
point for the debt-to-GDP ratio in 2024, nominal implicit interest rates and stock-flow 

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• 

• 

• 

• 

adjustments.  An  assessment  of  these  differences  in  assumptions  is  provided  below. 
The  assessment  takes  into  account  the  release  of  outturn  data  for  2024  after  the 
submission  of  the  plan,  which  shifts  the  base  year  of  the  recommendation  to  2024. 

The  differences  in  assumptions  with  the  most  significant  impact  on  average  net 
expenditure  growth  are  listed  below,  together  with  an  assessment  of  each  difference 
considered in isolation. 

The  plan  assumes  a  structural  primary  balance  of  -2.5%  of  GDP  in  2024,  which  is 
0.4 pp lower than the structural primary balance assumed in the prior guidance. This 
contributes  to  lower  average  net  expenditure  growth  over  the  adjustment  period  in 
the  plan  than  according  to  the  Commission’s  assumptions.  The  more  negative 
assumption  about  the  structural  primary  balance,  which  translates  into  a  higher 
expected  headline  fiscal  deficit  of  3%  of  GDP  in  2024,  reflects  the  latest  available 
budget  execution  data.  This  outturn  for  the  nominal  deficit  in  2024  has  since  been 
confirmed. Consequently, this assumption is deemed to be duly justified. 

The plan takes into account that the nominal implicit interest rate increased in 2024 
and  assumes  that  it  will  remain  above  the  levels  in  the  prior  guidance.  This 
contributes  to  lower  average  net  expenditure  growth  over  the  adjustment  period  in 
the  plan  than  according  to  the  Commission’s  assumptions.  The  interest  rates  are 
calculated  based  on  the  actual  interest  payments  and  government  debt  levels  and 
consider  the  interest  rates  on  the  new  debt  issued  in  2024  and  January  2025. 
Consequently, this assumption is deemed to be duly justified. 

The plan assumes potential GDP growth below the prior guidance in 2024 but above 
the  Commission’s  assumptions  in  2025-2033,  resulting  in  average  potential  GDP 
growth  of  2%  in  2025-2038,  compared  with  1.9%  in  the  prior  guidance.  This 
contributes to slightly higher average net expenditure growth (by approximately 0.1) 
over  the  adjustment  period  in  the  plan  than  according  to  the  Commission’s 
assumptions. Bulgaria states in its plan that the difference is explained largely by a 
combination  of  higher  labour  market  participation  rates  and  investment  growth, 
notably  in  the  public  sector.  Preliminary  employment  figures  for  2024  are  higher 
than projected in Commission's autumn 2024 forecast, suggesting that the deviation 
in  the  labour  input  for  potential  growth  is  justified.  The  public  investment 
assumption  in  the  plan  is  inherently  policy-driven  and  appears  to  be  in  line  with 
policy  orientations  as  also  confirmed  in  the  adopted  2025  Budget.  Overall,  the 
deviation based on these two factors is deemed to be justified. 

The  plan  assumes  GDP  deflator  growth  of  6.4%  in  2024,  1.6  pp  above  the  prior 
guidance,  to  remain  above  the  Commission’s  assumptions  in  2025  and  then  to  fall 
below  the  value  in  the  prior  guidance  for  2026.  This  contributes  to  slightly  higher 
average net expenditure growth (by approximately 0.1) over the adjustment period in 
the plan than according to the Commission’s assumptions. The higher GDP deflator 
in 2024 is justified by the latest national accounts figures that show a stronger GDP 
deflator increase in 2024, compared to the Commission’s assumptions. In 2025, the 
deviation from the prior guidance can be explained by the carry-over effect from the 
higher  GDP  deflator  in  the  second  half  of  2024.  Concerning  2025,  neither  the 
Commission's assumptions nor the Bulgarian plan factored in fully the restoration of 
the  VAT  rates  for  bread,  flour  and  restaurant  services,  electricity  price  hikes  for 
households and other price increases in January 2025. Reflecting these developments 
would  lead  to  higher  average  net  expenditure  growth  over  the  adjustment  period. 
With regards to 2026, the lower GDP deflator in the plan,  compared with the prior 

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guidance,  is  attributable  to  an  assumption  of  more  moderate  wage  increases.  The 
lower  wage  increases  for  2026  in  the  plan  reflect  the  assumed  higher  participation 
rates that are justified by the higher recorded participation rates for 2024, compared 
to  the  prior  guidance.  Consequently,  the  assumptions  on  higher  GDP  deflators  in 
2024 and 2025 and a lower GDP deflator in 2026 are deemed to be duly justified. 

The remaining differences in assumptions on debt and stock-flow adjustments and recent 
releases of relevant macro-fiscal indicators do not have a significant impact on average net 
expenditure growth compared to the Commission’s assumptions. 

Taken together the differences in assumptions lead to an average net expenditure growth in 
the  plan  that  is  lower  than  the  average  net  expenditure  growth  implied  by  the  technical 
information.  

The Commission will take into account the above assessment of the plan’s assumptions in 
future assessments of compliance with the net expenditure path. 

Fiscal strategy of the plan  

(22)  According  to  the  indicative  fiscal  strategy  in  the  plan,  the  commitments  on  net 
expenditure  will  be  delivered  mainly  through  discretionary  revenue-increasing 
measures.  On  the  revenue  side,  measures  to  improve  compliance  and  prevent  and 
counter  tax  fraud  and  evasion,  are  amongst  the  main  elements  supporting  the  fiscal 
targets.  Additional  revenue  measures  are  expected  to  yield  increases  in  social 
contributions, including increases in the threshold of the maximum insurable income 
and planned increases in the length of service for retirement. Lastly, the plan refers to 
planned  increases  in  excise  duties  on  tobacco  and  tobacco  products.  There  are  no 
significant consolidation measures on the expenditure side, while further increases are 
planned in line with recent trends. 

(23)  The specification of the policy measures to be adopted is to be confirmed or adjusted 
and  quantified  in  the  annual  budgets.  Some  measures  were  specified  in  the  2025 
budget,  adopted  by  the  National  Assembly  on  21  March  2025,  whereas  others  are 
expected  to  be  confirmed  in  the  forthcoming  budgets.  Measures  planned  for  2025 
include,  on  the  revenue  side,  an  increase  in  the  maximum  insurance  income,  an 
increase  in  the  rate  of  duty  on  tobacco  and  tobacco  products,  excise  as  well  as  the 
abolition of reduced VAT rates for  various categories  of goods and services. On the 
expenditure side, increases are planned for salaries in the area of defence and for the 
staff  in  budgetary  organisations.  Expenditure  increases  are  planned  in  pensions 
expenditure,  linked  amongst  others  to  the  increase  in  the  number  of  newly  awarded 
pensions  and  in  pensions  supplements.  At  the  same  time,  there  are  risks  to  the 
implementation  of  the  indicative  fiscal  strategy  in  the  plan,  due  to  a  general  lack  of 
detail  on  the  design  of  the  indicative  strategy,  the  low  predictability  of  revenues 
coming  from  measures  to  fight  tax  evasion  and  avoidance,  as  well  as  reliance  on  ad 
hoc financing sources such as dividends from state-owned enterprises. 

Reform  and  investment  intentions  in  the  plan  responding  to  the  main  challenges 
identified in the context of the European Semester and addressing the common priorities 
of the Union  

(24)  The plan describes policy intentions concerning reforms and investments to respond to 
the main challenges identified in the context of the European Semester, especially the 

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CSRs  and  to  address  the  common  priorities  of  the  EU.  The  plan  includes  more  than 
120  reforms  and  investments  addressing  the  common  priorities  of  the  EU,  of  which 
more than 60 are financially supported by the Recovery and Resilience Facility (RRF) 
and 40 by the Cohesion policy funds (MFF)10. The plan’s reforms and investments are 
also  based  on  an  existing  government  strategy  document  ‘National  Development 
Programme Bulgaria 2030’. 

Concerning  the  common  priority  of  a  fair  green  and  digital  transition,  including  the 
climate  objectives  set  out  in  Regulation  (EU)  2021/1119,  the  plan  includes  several 
measures  grouped  under  policy  headings  such  as  boosting  transport  connectivity, 
energy,  promoting  digitalisation,  strengthening  education  skills  and  employment, 
water supply and wastewater treatment, and climate environment and agriculture. The 
reforms and investments included in the plan intend to address, amongst others, CSRs 
on  energy  efficiency  issued  in  2022  and  2023,  on  energy  efficiency  and  social 
inclusion and protection issued in 2023 and 2024, on renewable energy, infrastructure 
and networks issued in 2019, 2020, 2022, 2023 and 2024, on research and innovation 
and  regional  development  and  local  public  services  issued  in  2019,  on  transport  and 
regional  development  issued  in  2019,  2020,  2023  and  2024,  on  skills,  vocational 
education and training and adult learning issued in 2019, 2020, 2023, 2024.  

(25)  Concerning  the  common  priority  of  social  and  economic  resilience,  including  the 
European  Pillar  of  Social  Rights,  the  plan  includes  several  reforms  and  investments 
spanning  across  different  policy  domains  from  sustainable  public  finances,  economy 
and  business  environment,  strengthening  justice,  governance  and  financial  integrity, 
boosting  transport  connectivity,  energy,  promoting  health  and  social  inclusion, 
education  skills  and  employment.  The  reforms  and  investments  included  in  the  plan 
intend  to  address,  amongst  others,  CSRs  on  healthcare  issued  in  2019  and  2020,  on 
labour market policies issued in 2019 and 2020, on education, non-discrimination and 
equal  opportunities  issued  in  2020  and  2024,  on  access  to  finance  and  growth 
financing  issued  in  2020,  on  budgetary  framework  and  fiscal  governance  issued  in 
2020, 2022 and 2023, on poverty and social inclusion issued in 2019, 2020, 2023 and 
2024,  on  business  environment  issued  in  2019  and  2020,  on  renewable  energy, 
infrastructure and networks issued in 2019, 2020, 2022, 2023 and 2024, on transport 
and regional development issued in 2019, 2020, 2023 and 2024, on tax administration, 
evasion and avoidance issued in 2019.  

(26)  Concerning  the  common  priority  of  energy  security,  the  plan  includes  reforms  and 
investments  to  ensure  energy  independence  while  also  decarbonising  the  energy 
sector. The plan includes reforms to promote the adoption of market principles in the 
energy sector, including by liberalising the electricity market, reforms and investments 
to differentiate supply and improving ties with neighbouring countries, and to promote 
the  production  and  storage  of  renewable  energy.  The  reforms  and  investments 
included  in  the  plan  intend  to  address,  amongst  others,  CSRs  on  renewable  energy, 
infrastructure  and  networks  issued  in  2019,  2020,  2022,  2023  and  2024,  on  energy 
efficiency  issued  in  2022  and  2023,  on  energy  efficiency  and  social  inclusion  and 
protection issued in 2023 and 2024.  The plan does not include measures to address the 
2019  CSR  on  upgrading  the  state-owned  enterprise  corporate  governance  and 

10 
The references in the Bulgarian medium-term fiscal-structural plan reflect the currently valid recovery 
and resilience plan. The Bulgarian government intends to submit a request for revising its recovery and resilience 
plan under Article 21 of Regulation (EU) 2021/241 as well as a request to add a REPowerEU chapter.  

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measures  to  address  the  2019  and  2020  CSRs  on  effective  supervision  and 
enforcement of the anti-money laundering framework. However, these are covered by 
measures under the RRP and ERMII post-entry commitments. The plan also does not 
include measures to address the 2019 CSR on enforcing group-level supervision in the 
non-banking  financial  sector  and  on  addressing  structural  weaknesses  of  the  car 
insurance sector. 

(27)  Concerning the common priority of defence capabilities, the plan includes investments 
in modernisation and acquisition of new military capabilities in line with the Defence 
Investment Programme, a plan adopted by the National Assembly and covering a time 
horizon until 2032.  

(28)  The  plan  provides 

information  on 

the  consistency  and,  where  appropriate, 
complementarity, with the cohesion policy funds and Bulgaria’s RRP. The plan makes 
appropriate  references  to  the  measures  included  in  the  RRP,  MFF  and  puts  forward 
some additional ones that are nationally funded.  

(29)  The plan provides  an overview of the public investment needs of Bulgaria related to 
the  common  priorities  of  the  EU.  Concerning  EU  common  priority  of  a  fair  green 
transition,  including  coherence  with  European  climate  legislation,  the  plan  identifies 
investment needs linked to the five priority fields identified in the integrated national 
energy and climate plan for 2021-2030 prepared under Regulation 2018/1999, namely: 
1) decarbonisation, 2) energy efficiency, 3) energy security, 4) internal energy market 
and  5)  research,  innovation  and  competitiveness.  In  addition,  the  plan  identifies 
investment  needs  linked  to  climate  change  adaptation.  Concerning  investment  needs 
for social and economic resilience, including the European Pillar of Social Rights, the 
plan identifies investment needs in the areas of education, skills, employment, access 
to  healthcare,  social  services  and 
the 
implementation  of  the  European  Child  Guarantee.  Concerning  the  EU  common 
priority  of  energy  security,  the  plan  identifies  investment  needs  to  diversify  sources 
and routes for natural gas supply, including by developing infrastructure; further needs 
concern  hydro  power  plants  and  floating  power  plants,  the  use  of  biomass  for 
electricity  production,  and  electricity  storage  capacity.  Concerning  the  EU  common 
priority  of  building  defence  capabilities  as  necessary,  the  plan  identifies  investment 
needs in the modernisation of the country’s armed forces. 

long-term  care,  gender  equality  and 

Conclusion of the Commission’s assessment 

(30)  Overall, the Commission is of the view that Bulgaria’s plan fulfils the requirements of 

Regulation (EU) 2024/1263. 

OVERALL CONCLUSION 

(31) 

In accordance with Article 17 of Regulation (EU) 2024/1263, the net expenditure path 
as  set  in  the  plan  should  be  recommended  by  the  Council  to  Bulgaria  starting  from 
2025. 

HEREBY RECOMMENDS that BULGARIA 

Ensure that net expenditure growth does not exceed the maxima established in Annex I to this 
Recommendation.  

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ANNEX I 

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Maximum growth rates of net expenditure 
(annual and cumulative growth rates, in nominal terms) 
Bulgaria 

Years 

2025 

2026 

2027 

2028 

Growth rates (%) 

Annual 

Cumulative (*) 

6.2 

6.2 

4.9 

11.4 

4.4 

4.0 

16.3 

21.0 

(*) The cumulative growth rates are calculated by reference to the base year of 2024. The cumulative 
growth rates are used in the annual monitoring of ex-post compliance in the control account. 

Done at Brussels, 

For the Council 
The President 

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