Brussels, 6 July 2010
Bulgaria: Next steps under the EDP procedure
Based on the data notified by the Bulgarian authorities in April 2010 and subsequently validated by Eurostat, namely a general government deficit of 3.9% of GDP in 2009, the Commission decided to initiate an excessive deficit procedure for Bulgaria with the adoption of a report under Article 126(3) of the Treaty. The report concluded that while the government gross debt at 14.8% of GDP in 2009 fulfils the respective criterion in the Treaty, the requirement on the deficit criterion was not fulfilled because the deficit in 2009 was not close to the reference value of 3% of GDP.
Today, the Commission undertook additional steps under the Excessive Deficit Procedure for Bulgaria in light of the Treaty and the SGP. In particular, it concluded that an excessive deficit exists in Bulgaria and addressed two recommendations to the Council. The first one is for the Council to decide in the same sense and the second one - for the Council to issue a recommendation to Bulgaria with respect to the correction of the excessive deficit.
In more details, the Commission recommends the Bulgarian authorities to bring the general government deficit below 3% of GDP in a credible and sustainable manner by 2011 at the latest. To this end, Bulgaria should take necessary measures to avoid deterioration of the 2010 deficit beyond the planned 3.8% of GDP, ensure a fiscal effort of at least ¾% of GDP in 2011, and specify and implement the measures that are necessary to achieve the correction of the excessive deficit by 2011. To limit the risks to the adjustment, Bulgaria is also invited to strengthen its fiscal governance and transparency by reinforcing the Ministry of Finance's spending controls, strengthening the binding nature of its medium-term budgetary framework as well as improving the monitoring of the budget execution throughout the year. The authorities are expected to report on the progress made in the implementation of these recommendations in a separate chapter in the forthcoming updates of the convergence programme until the abrogation of the excessive deficit procedure. Bulgaria is invited to ensure that budgetary consolidation towards the medium-term objective for the budgetary position is sustained after the excessive deficit has been corrected. Finally, the Bulgarian authorities are encouraged to improve the efficiency of public spending by fully implementing the planned structural reforms in the area of public administration, healthcare, education, and pensions.