Sofia: Bulgaria has become the only member state pushed this summer into the corrective arm of the EU’s fiscal rulebook. On 10 July finance ministers opened an excessive deficit procedure against Sofia, singling it out from a wider group of governments whose books drifted past the three percent ceiling.
The Commission had flagged five countries whose deficits exceeded, or were set to exceed, the reference value in 2025 or 2026: Bulgaria, Germany, Estonia, Latvia and Slovenia. Ministers judged that only Bulgaria warranted the formal step now, a decision that carries extra weight as the country readies its long-sought entry into the euro area.
Under the procedure, Sofia must lay out corrective measures by mid-October and hold nominal net spending growth to a tightening path over the coming years. The Council pencilled in a ceiling that starts near four percent in 2026 and widens only slowly, forcing the government to keep expenditure well below the pace of recent budgets.
The timing stings. Bulgaria has campaigned for years to adopt the single currency, and joining the euro demands exactly the kind of fiscal discipline the deficit procedure now polices. Ministers insist the two tracks are compatible, arguing that a credible correction plan strengthens rather than undermines the case for membership.
The move lands inside the wider European Semester, the annual cycle in which the Council signs off country recommendations on spending, reform and investment. This year’s guidance leans hard on competitiveness, energy security and defence readiness, priorities that themselves cost money and complicate the arithmetic for governments already close to the limit.
Economists reading the decision see a signal aimed beyond Sofia. By acting against one country while holding fire on larger economies also above the line, ministers preserve the credibility of the framework without triggering a politically fraught confrontation with Berlin. The restraint may not last if deficits in the bigger capitals fail to narrow.
The correction also tests the revamped fiscal framework itself. Ministers rebuilt the rules to lean on medium-term spending paths rather than blunt annual targets, promising a gentler, more predictable route back to balance. Bulgaria is among the first cases to run through that machinery in anger, and how cleanly the process works will shape whether other capitals trust it when their own numbers slip.
For Bulgarians, the practical question is what gets cut. The government must find savings that satisfy Brussels without choking a growing economy, and it must do so under the scrutiny that comes with the excessive deficit procedure. The Council’s semester package sets the wider frame.
