European Commission announces there are no reasons for launching an excessive deficit procedure against Bulgaria

The European Commission has confirmed the expectations of the Bulgarian institutions for the lack of any reasons to launch an excessive deficit procedure against the country. The European Commission released today a Report for the Republic of Bulgaria drafted in accordance with Article 126 (3) of the Stability and Growth Pact referring to the commitments for implementation of the excessive deficit procedures in the EU member states.

The Commission report considers the factors that had led to the deterioration of the general government deficit to 5.8% of GDP in 2014. It qualifies the excess over the target of 3% of GDP in 2014 as exceptional as it results from an unusual event outside the control of the government, linked to the statistical reclassification of the Deposit Insurance Fund.

In addition, the report mentions that the deviation from the reference value of the budget balance on accrual basis is temporary, with the latest Commission forecasts expecting the general government deficit decline below 3% of GDP both in 2015 and in the coming years as well. Based on its estimates of the structural budget balance for 2015 and 2016, the European Commission expects that Bulgaria will fulfil its commitments with regard to the required minimum annual adjustment so as to reach the country's medium-term budget objective (MTO).