Deputy Prime Minister Atanas Pekanov announced the cutting of 5,000 positions in the central administration and the termination of the existing mechanism for indexing remuneration in the “Security” and “Defence” sectors. He presented the measures as part of efforts to limit budget expenditure.
More than half of the positions slated for cuts are occupied. According to Pekanov, a significant number of employees will be laid off, while others may retire. He did not specify how the cuts would be distributed among the individual ministries.
“This is being stopped because it has placed an exceptionally heavy burden on the budget in the coming years,” Pekanov said regarding the indexation of salaries in the security and defence sectors.
Spending on the Interior Ministry and defence has increased significantly
According to data presented by the deputy prime minister, spending on the Interior Ministry increased by 76% between 2023 and 2025. The increase amounts to €863 million. In the defence system, the increase was 62%, or around €500 million.
Pekanov defended the proposed state budget and said that the government is seeking a balance between social spending, limiting the deficit and investment in economic growth.
Energy prices remain a problem for businesses
High energy prices are the most serious obstacle facing Bulgarian businesses, the deputy prime minister said. According to him, the increase in natural gas prices is among the main reasons for inflation remaining elevated.
“Energy policy and energy prices are the major obstacle,” Pekanov said.
He said that the government was discussing the optimisation of existing support programmes for businesses. The possibility of using state liquidity resources is also being considered, but no specific amounts or deadlines were given.
Pekanov linked high gas prices to the war in the Middle East and criticised the European model under which the price of gas affects the final price of electricity. According to him, natural gas in Europe is 11 times more expensive than in the United States. The deputy prime minister also said that inflation was unlikely to return to 2% next year.
Pension funds and the budget deficit
Pekanov denied that the transfer of funds from the second to the first pension pillar had been discussed at the government meetings he attended. He said that such a measure was also not included in the final budget documents.
The deputy prime minister specified that various options for limiting the deficit were being discussed with the European Commission. He said that the budget deficit was 3.5% on a cash basis and 4.2% under the European methodology. “Unfortunately, both figures are above the required 3%,” Pekanov said.
He confirmed that Bulgaria is subject to an excessive deficit procedure, but rejected the claim that this automatically leads to the suspension of European funding.
The government is also discussing ways of directing private capital, including pension fund resources, towards major infrastructure projects. Pekanov stressed that the talks are at an early stage and that there are still no specific decisions.
Sources: btvnovinite.bg