Bulgaria facing EU punishment months after joining eurozone

Bulgaria is facing EU sanctions due to an excessive budget deficit, just months after joining the eurozone, Prime Minister Rumen Radev has said. He claimed that the crisis was caused by the previous pro-EU government, which massaged economic numbers to narrowly pass the threshold to join the eurozone in the first place.

Speaking at a cabinet meeting in Sofia on Friday, Radev, who is widely regarded as an EU skeptic, said that the European Commission would publish its formal report on the country’s fiscal situation on June 3, thus launching the so-called excessive deficit procedure.

Under the procedure, Sofia must bring spending from last year’s 3.5% back below the 3% ceiling by putting a binding cap on the budget deficit. If Bulgaria fails, the EU can freeze funding and go as far as to impose fines of up to 0.05% of GDP every six months on the Balkan country.

Radev blamed the situation on a “difficult legacy” stemming from “negligence, incompetence, voluntarism, populism, and financial misconduct” by the previous center-right and pro-EU Zhelyazkov government, which collapsed in December 2025 following mass anti-corruption protests.

The prime minister also predicted that “this year, the deficit will be even larger” than 3.5%. The European Commission forecasts that the deficit will hit 4.1% of GDP this year, rising to 4.3% in 2027.
“They [the previous government] lied to push Bulgaria into the euro… The bubble has burst,” he said of the budget deficit.

Bulgaria joined the eurozone on January 1, 2026, after barely meeting the criteria, especially in terms of inflation, which was the greatest hurdle. Proponents of the push sought to lock Bulgaria on the pro-West and pro-EU path, with practical monetary consequences deemed minimal as the Bulgarian lev had been pegged to the euro for decades.

However, critics have argued that the Zhelyazkov coalition – which supported eurozone membership – projected an unrealistic revenue growth, with potential to balloon the budget deficit.

A Politico report in 2025 also drew attention to a sudden and “mysterious” 82.8% cut in state-set daily hospital fees in April – a move that helped lower Bulgaria’s 12-month average inflation. At the time, an unnamed former local official told the paper that “the only reason Bulgaria has qualified is… due to state-administered prices.” According to Politico, the previous government also cut inflation by slashing rail fares by over 9%.

Radev – who has advocated for more pragmatic ties with Russia and consistently opposed military aid to Ukraine – was not against the eurozone per se, but insisted that such a decision could be made only on a public referendum.

However, the parliament blocked his request, with critics accusing him of trying to sabotage the process. Radev himself said that Bulgarian citizens were being ignored by an elite “marching toward the eurozone” and that “the representatives of the people denied the people their right to choose.”