Bulgarian Government Withdraws Budget Proposal Amid Protests
SOFIA, Bulgaria – The Bulgarian government has decided to retract its budget proposal for 2026 following widespread protests and international concerns over significant tax hikes outlined in the plan.
This unexpected decision was revealed by Boyko Borisov, the head of the ruling GERB party. He urged the government to reopen discussions with employers and trade unions to find common ground regarding state finances. This budget-related upheaval arises as Bulgaria aims to join the eurozone next year.
The protests underscore widespread anxiety about the potential economic repercussions of the budget on citizens and businesses. The proposed budget featured a rise in social security payments and a plan to double the dividend tax.
Prime Minister Rosen Zhelyaskov stated that the budget, which had already passed its first parliamentary reading, will be revised after discussions with social partners and opposition groups to address its “deficiencies.”
“The revised budget should maintain balance and align with our coalition government’s objectives. This will help ensure a smooth entry into the eurozone by January 1,” he remarked.
Critics, including opposition parties and business associations, have cautioned that the intended tax hikes and increased expenditures could potentially stifle investment and contribute to a growing shadow economy.
Earlier in the week, the European Commission raised alarms about Bulgaria’s proposed budget, stating it could exceed the EU’s guidelines for spending increases. Moreover, the International Monetary Fund advised Bulgaria to implement austerity measures.
Public sentiment erupted on the streets, with the most significant protests occurring on Wednesday night, when thousands assembled outside the Parliament to voice their opposition to plans to increase national pension insurance contributions by 2% and double the dividend tax to 10%.
Protesters also called for greater transparency in government spending and criticized projected expenditures that would account for approximately 46% of the country’s gross domestic product for the upcoming year. Organizers suggested that over 20,000 individuals participated in the demonstration.
Opponents of the budget contended that the spending plan would primarily rely on increased taxes for businesses and individuals, alongside a rise in public debt. They argued that this approach might heighten inflation without enhancing the efficiency of public services.
