The European Commission approved Bulgaria’s fiscal plan – a condition for the euro

The European Commission has approved Bulgaria’s medium -term structural plan – one of the conditions for successful entry into the euro area.

The plan that describes how the government will hold budget expenses within 3% deficit requirements and debt below 60% by 2028, along with reforms and investments that will maintain sustainable finances and growth over the next four years.

Finance Minister Temenuzhka Petkova said in Brussels on Tuesday that « this is extremely good news for Bulgaria, as it shows that Bulgaria will have public finances that are stable and sustainable. »

In February, European Commission Vice President Valdis Dombrovskis credited the plan as one of the unfulfilled conditions for a positive decision for the euro, then with the criterion for inflation, the adoption of the budget for 2025 and the amendments to the BNB Act.

The positive evaluation of the EC is a sign that Bulgaria complies with the pledged path to the euro area and meets the requirements for sustainable public finance and economic stability.

What approved Brussels

The plan includes over 120 reforms and investments aimed at overall EU priorities, of which over 60 are financially supported by the recovery and sustainability mechanism, and 40 – by European rapprochement policy funds.

According to the plan, the balance of the consolidated state budget will not exceed the reference value of 3% of GDP by 2028, and the government is committed that in the ten years it will not exceed 3% of GDP.

The debt of the Government Government sector will remain well below the reference value of the contract of 60% of GDP in the medium term, and it is set to reach 30.8% of GDP in 2028 and 45.3% in 2038.

With regard to economic growth, the European Commission states that the Bulgarian authorities rely higher than its forecasts-an average of 2% by 2028, which they explain « with a combination of higher levels of participation in the labor market and investment growth, especially in the public sector. »

The road to June

The European Commission announced in April that the report would be published together with the European Semester reports on April 4. If it is positive, it will contain a recommendation for the admission of Bulgaria in the euro area and the date of when it will be a fact.

Dombrovskis said he met with Petkova together with Eurogroup chief Patrick Donkyu and representatives of the ECB on Monday, with the Bulgarian Finance Minister maintained the request for the preparation of the report, so the work on it continues and it will be published in the beginning of June.