The Council has opened an excessive deficit procedure as Sofia faces an October deadline to show how it will bring public finances back under EU limits
Bulgaria has been placed under the EU’s excessive deficit procedure, sharpening scrutiny of public finances in the country’s first year using the euro. The Council of the EU says Sofia must present corrective measures by 15 October 2026 and follow a path intended to bring the deficit back under the bloc’s 3% threshold by 2029.
The Council decision, adopted on 10 July, cites Bulgaria’s projected government deficit of 4.1% of GDP in 2026, with the deficit expected to remain above 3% in 2027. The Council also said Bulgaria’s use of the national escape clause for defence spending does not fully account for the breach.
A new euro member under scrutiny
The decision lands only months after Bulgaria joined the euro area on 1 January 2026. The European Times previously reported that the EU had given Bulgaria the final green light to adopt the euro, a step presented at the time as a way to reduce exchange costs, improve price transparency and deepen integration with the single currency area.
Now, Sofia faces a different side of euro-area membership: closer fiscal surveillance. The excessive deficit procedure is designed to push member states back toward sustainable budgets when deficits exceed Treaty reference values. The Council says Bulgaria should keep cumulative net expenditure growth within limits of 4.2% in 2026, 7.7% in 2027, 11.4% in 2028 and 15% in 2029.
Why the procedure matters
The case is not only a technical budget exercise. For households, the shape of Bulgaria’s correction plan may affect public investment, social support, wages, taxation and the pace of reforms. For investors and EU partners, it will be read as an early signal of how the newest euro-area member manages fiscal credibility under pressure.
The EU’s excessive deficit framework allows the Council to issue recommendations and deadlines. If a euro-area country fails to take effective action, sanctions can follow, including repeated fines. Such measures are not automatic at this stage, but the procedure places Bulgaria under enhanced scrutiny.
Bulgarian authorities now have a narrow window to show how they will reduce the deficit without undermining social fairness or economic confidence. The political challenge is clear: fiscal repair must be credible in Brussels, but also bearable for citizens still adjusting to the practical and psychological effects of the currency change.
The Council’s move also comes as EU finance ministers are urging governments across the bloc to balance competitiveness, energy security, defence needs and social protection without allowing public finances to drift. Bulgaria’s case shows how quickly that wider European debate can become a national deadline.
