Deputy Prime Minister Atanas Pekанов announced plans to cut 5,000 positions in the central administration and terminate the existing mechanism for indexing remuneration in the “Security” and “Defense” sectors. He presented the measures as part of efforts to limit budget expenditure.
More than half of the positions slated for cuts are currently occupied. According to Pekанов, a significant number of employees will be dismissed, 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 extremely heavy burden on the budget in the coming years,” Pekанов said regarding salary indexation in the security and defense sectors.
Expenditure on the Interior Ministry and defense has increased significantly
According to data presented by the Deputy Prime Minister, expenditure on the Interior Ministry increased by 76% between 2023 and 2025. The increase amounts to €863 million. In the defense system, the increase was 62%, or around €500 million.
Pekанов defended the proposed state budget and said the government was seeking a balance between social spending, reducing the deficit and investments 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 rise in natural gas prices is one of the main reasons inflation remains elevated.
“Energy policy and energy prices are the major obstacle,” Pekанов said.
He said the government was discussing the optimization of existing support programs for businesses. The possibility of using state liquidity resources is also being considered, but no specific amounts or deadlines were given.
Pekанов linked high gas prices to the war in the Middle East and criticized 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
Pekанов denied that the government meetings he had attended had discussed transferring funds from the second to the first pension pillar. He said that such a measure was also absent from the final budget documents.
The Deputy Prime Minister explained that various options for limiting the deficit were being discussed with the European Commission. He said 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%,” Pekанов said.
He confirmed that Bulgaria was subject to an excessive deficit procedure, but rejected the claim that this automatically led to the suspension of European funding.
The government is also discussing options for directing private capital, including pension fund assets, toward major infrastructure projects. Pekанов stressed that the talks were at an early stage and that no concrete decisions had yet been made.
Sources: btvnovinite.bg