Bulgaria Faces EU Deficit Procedure After Euro Entry

According to Brussels Signal, Bulgarian Prime Minister Rumen Radev confirmed that the European Commission will publish a formal report on June 3 launching an excessive deficit procedure against Sofia. The country’s deficit reached 3.5 per cent of gross domestic product last year, breaching the 3 per cent ceiling mandated for eurozone members.

The procedure will place Bulgaria under heightened fiscal scrutiny as Brussels moves to enforce budgetary discipline across the bloc. It also puts Radev’s new government on a collision course with the Commission only weeks after taking office.

Bulgaria joined the eurozone at the start of 2026, replacing the lev at a fixed rate of 1.95583 leva to the euro. The move was celebrated by pro-EU factions as a milestone for the Balkan nation, but critics have long questioned whether Sofia genuinely met the economic criteria for membership.

Radev, widely regarded as an EU skeptic, has blamed the previous pro-EU government for manipulating economic data to secure eurozone entry. He told a cabinet meeting in Sofia that officials had lied to push Bulgaria into the euro and that the bubble has now burst.

The European Commission forecasts that Bulgaria’s deficit will climb to 4.1 per cent of GDP this year and 4.3 per cent in 2027. Under the excessive deficit procedure, the Bulgarian government will be required to bring spending back below the 3 per cent limit through a binding cap on the deficit.

Bulgaria is not alone in facing fiscal scrutiny. The Financial Times reported that 10 other member states are also expected to face procedures over breaches of the bloc’s fiscal rules, including Italy, Romania and Finland.

Opposition Denies Data Manipulation

The opposition has rejected Radev’s allegations. Former finance minister Temenuzhka Petkova of the GERB party accused the Prime Minister of lying, arguing that the procedure relates to 2026 projections rather than final figures for 2025.

Petkova said a derogation for higher military spending reduced the reported deficit and emphasized that all data used for eurozone entry had been verified by Eurostat and the National Statistical Institute.

Asen Vasilev of the Produlzhavame Promyanata party said the ruling majority has the power to cut the 2026 deficit below 3 per cent of GDP and avoid the procedure altogether.

The Bulgarian finance ministry has been expected to hold a briefing on the matter, though no official statement had been released at the time of reporting.

The controversy underscores broader concerns about the integrity of economic data used to determine eurozone eligibility and the willingness of Brussels to enforce fiscal discipline once countries have been admitted to the currency union.

With information from Brussels Signal