Henstilling med henblik på RÅDETS HENSTILLING om Bulgariens økonomiske, sociale, beskæftigelsesmæssige, strukturelle og budgetmæssige politikker

EN EN
EUROPEAN
COMMISSION
Brussels, 4.6.2025
COM(2025) 202 final
Recommendation for a
COUNCIL RECOMMENDATION
on the economic, social, employment, structural and budgetary policies of Bulgaria
{SWD(2025) 202 final}
Offentligt
KOM (2025) 0202 - Henstilling
Europaudvalget 2025
EN 1 EN
Recommendation for a
COUNCIL RECOMMENDATION
on the economic, social, employment, structural and budgetary policies of Bulgaria
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular
Article 121(2) and Article 148(4) thereof,
Having regard to Regulation (EU) 2024/1263 of the European Parliament and of the Council
of 29 April 2024 on the effective coordination of economic policies and on multilateral
budgetary surveillance and repealing Council Regulation (EC) No 1466/971
, and in particular
Article 3(3) thereof,
Having regard to the recommendation of the European Commission,
Having regard to the resolutions of the European Parliament,
Having regard to the conclusions of the European Council,
Having regard to the opinion of the Employment Committee,
Having regard to the opinion of the Economic and Financial Committee,
Having regard to the opinion of the Social Protection Committee,
Having regard to the opinion of the Economic Policy Committee,
Whereas:
General considerations
(1) Regulation (EU) 2024/1263, which entered into force on 30 April 2024, specifies the
objectives of the economic governance framework, which aims at promoting sound
and sustainable public finances and sustainable and inclusive growth and resilience
through reforms and investments, and preventing excessive government deficits. The
Regulation stipulates that the Council and the Commission conduct multilateral
surveillance in the context of the European Semester in accordance with the objectives
and requirements set out in the TFEU. The European Semester includes, in particular,
the formulation, and the surveillance of the implementation of country-specific
recommendations. The Regulation also promotes national ownership of fiscal policy
and emphasises its medium-term focus, combined with more effective and coherent
enforcement. Each Member State must submit to the Council and the Commission a
national medium-term fiscal-structural plan, containing its fiscal, reform and
investment commitments, over 4 or 5 years, depending on the length of the national
legislative term. The net expenditure2
path in these plans has to comply with the
1
OJ L, 2024/1263, 30.4.2024, ELI: http://data.europa.eu/eli/reg/2024/1263/oj.
2
Net expenditure as defined in Article 2, point (2), of Regulation (EU) 2024/1263: ‘net expenditure’
means government expenditure net of (i) interest expenditure; (ii) discretionary revenue measures; (iii)
expenditure on programmes of the Union fully matched by revenue from Union funds; (iv) national
expenditure on co-financing of programmes funded by the Union; (v) cyclical elements of
unemployment benefit expenditure; and (vi) one-offs and other temporary measures.
EN 2 EN
Regulation’s requirements, including the requirements to put or keep general
government debt on a plausibly downward path by the end of the adjustment period, or
for it to remain at prudent levels below 60% of gross domestic product (GDP), and to
bring and/or maintain the general government deficit below the 3%-of-GDP Treaty
reference value over the medium term. Where a Member State commits to a relevant
set of reforms and investments in accordance with the criteria set out in the
Regulation, the adjustment period may be extended by up to three years.
(2) Regulation (EU) 2021/241 of the European Parliament and of the Council3
, which
established the Recovery and Resilience Facility (the ‘RRF’), entered into force on
19 February 2021. The RRF provides financial support to Member States for
implementing reforms and investments, delivering a fiscal impulse financed by the
Union. In line with the priorities of the European Semester for economic policy
coordination, the RRF fosters economic and social recovery while driving sustainable
reforms and investments, in particular promoting the green and digital transitions and
making Member States’ economies more resilient. It also helps strengthen public
finances and boost growth and job creation in the medium and long term, improve
territorial cohesion within the Union and support the continued implementation of the
European Pillar of Social Rights.
(3) Regulation (EU) 2023/435 of the European Parliament and of the Council4
(the
‘REPowerEU Regulation’), which was adopted on 27 February 2023, aims to phase
out the Union’s dependence on Russian fossil-fuel imports. This helps achieve energy
security and diversify the Union’s energy supply, while increasing the uptake of
renewables, energy storage capacities and energy efficiency.
(4) On 15 October 2021, Bulgaria submitted its national recovery and resilience plan to
the Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241.
Pursuant to Article 19 of that Regulation, the Commission assessed the relevance,
effectiveness, efficiency and coherence of the recovery and resilience plan, in
accordance with the assessment guidelines set out in Annex V. On 4 May 2022, the
Council adopted its Implementing Decision approving the assessment of the recovery
and resilience plan for Bulgaria5
, which was amended under Article 18(2) on
8 December 2023 to update the maximum financial contribution for non-repayable
financial support6
. The release of instalments is conditional on the adoption of a
decision by the Commission, in accordance with Article 24(5), stating that Bulgaria
has satisfactorily achieved the relevant milestones and targets set out in the Council
Implementing Decision. Satisfactory achievement requires that the achievement of
preceding milestones and targets for the same reform or investment has not been
reversed.
3
Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021
establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17, ELI:
http://data.europa.eu/eli/reg/2021/241/oj).
4
Regulation (EU) 2023/435 of the European Parliament and of the Council of 27 February 2023
amending Regulation (EU) 2021/241 as regards REPowerEU chapters in recovery and resilience plans
and amending Regulations (EU) No 1303/2013, (EU) 2021/1060 and (EU) 2021/1755, and Directive
2003/87/EC (OJ L 63, 28.2.2023, p. 1, ELI: http://data.europa. eu/eli/reg/2023/435/oj).
5
Council Implementing Decision of 4 May 2022 on the approval of the assessment of the recovery and
resilience plan for Bulgaria (8091/22).
6
Council Implementing Decision of 8 December 2023 amending the Implementing Decision of 4 May
2022 on the approval of the assessment of the recovery and resilience plan for Bulgaria (15837/2023).
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(5) On [date], the Council, upon the recommendation of the Commission, adopted a
recommendation endorsing the national medium-term fiscal-structural plan of
Bulgaria7
. The plan was submitted in accordance with Article 11 and Article 36(1),
point (a), of Regulation (EU) 2024/1263, covers the period from 2025 until 2028 and
presents a fiscal adjustment spread over four years.
(6) On 26 November 2024, on the basis of Regulation (EU) No 1176/2011, the
Commission adopted the 2025 Alert Mechanism Report, in which it did not identify
Bulgaria as one of the Member States for which an in-depth review would be needed.
The Commission also adopted a recommendation for a Council recommendation on
the economic policy of the euro area and a proposal for the 2025 Joint Employment
Report, which analyses the implementation of the Employment Guidelines and the
principles of the European Pillar of Social Rights. The Council adopted the
Recommendation on the economic policy of the euro area8
on 13 May 2025 and the
Joint Employment Report on 10 March 2025.
(7) On 29 January 2025, the Commission published the Competitiveness Compass, a
strategic framework that aims to boost the EU’s global competitiveness over the next
five years. It identifies the three transformative imperatives of sustainable economic
growth: (i) innovation; (ii) decarbonisation and competitiveness; and (iii) security. To
close the innovation gap, the EU aims to foster industrial innovation, support the
growth of start-ups through initiatives like the EU Start-up and Scale-up Strategy, and
promote the adoption of advanced technologies like artificial intelligence and quantum
computing. In pursuit of a greener economy, the Commission has outlined a
comprehensive Affordable Energy Action Plan and a Clean Industrial Deal, ensuring
that the shift to clean energy remains cost-effective, competitiveness-friendly,
particularly for energy-intensive sectors, and is a driver for growth. To reduce
excessive dependencies and increase security, the Union is committed to strengthening
global trade partnerships, diversifying supply chains and securing access to critical
raw materials and clean energy sources. These priorities are underpinned by horizontal
enablers, namely regulatory simplification, deepening of the single market, financing
competitiveness and a Savings and Investments Union, promotion of skills and quality
jobs, and better coordination of EU policies. The Competitiveness Compass is aligned
with the European Semester, ensuring that Member States’ economic policies are
consistent with the Commission’s strategic objectives, creating a unified approach to
economic governance that fosters sustainable growth, innovation and resilience across
the Union.
(8) In 2025, the European Semester for economic policy coordination continues to
develop alongside the implementation of the RRF. The full implementation of the
recovery and resilience plans remains essential for delivering on the policy priorities
under the European Semester, as the plans help effectively address all or a significant
subset of challenges identified in the relevant country-specific recommendations
issued in recent years. The country-specific recommendations remain equally relevant
for the assessment of amended recovery and resilience plans in accordance with
Article 21 of Regulation (EU) 2021/241.
7
Council Recommendation of [21 January/18 February/…] 2025 [endorsing the medium-term fiscal-
structural plan / setting the net expenditure path] of [Country], OJ C/2025/[6xx/xxx],
[10.2/dd.mm].2025.
8
Council Recommendation of 13 May 2025 on the economic policy of the euro area (OJ C,
C/2025/2782, 22.5.2025, ELI: http:// data.europa.eu/eli/C/2025/2782/oj).)
EN 4 EN
(9) The 2025 country-specific recommendations cover the key economic policy
challenges that are not sufficiently addressed by measures included in the recovery and
resilience plans, taking into account the relevant challenges identified in the 2019-
2024 country-specific recommendations.
(10) On 4 June 2025, the Commission published the 2025 country report for Bulgaria. It
assessed Bulgaria’s progress in addressing the relevant country-specific
recommendations and took stock of Bulgaria’s implementation of the recovery and
resilience plan. Based on this analysis, the country report identified the most pressing
challenges Bulgaria is facing. It also assessed Bulgaria’s progress in implementing the
European Pillar of Social Rights and in achieving the Union headline targets on
employment, skills and poverty reduction, as well as progress in achieving the United
Nations Sustainable Development Goals.
Assessment of the Annual Progress Report
(11) On [date] the Council recommended the following maximum growth rates of net
expenditure for Bulgaria: 6.2% in 2025, 4.9% in 2026, 4.4% in 2027, and 4.0% in
2028, which correspond to the maximum cumulative growth rates calculated by
reference to 2024 of 6.2% in 2025, 11.4% in 2026, 16.3% in 2027, and 21% in 2028.
On 2 May 2025 Bulgaria submitted its Annual Progress Report9
, on relevant fiscal
outturn data and projections, and the implementation of reforms and investments
responding to the main challenges identified in the European Semester country-
specific recommendations. The Annual Progress Report also reflects Bulgaria’s
biannual reporting on the progress made in achieving its recovery and resilience plan
in accordance with Article 27 of Regulation (EU) 2021/241.
(12) Russia’s war of aggression against Ukraine and its repercussions constitute an
existential challenge for the European Union. The Commission recommended to
activate the national escape clause of the Stability and Growth Pact in a coordinated
manner to support the EU efforts to achieve a rapid and significant increase in defence
spending and this proposal was welcomed by the European Council of 6 March 2025.
Following the request of Bulgaria on 2 May 2025, on [date] the Council, upon the
recommendation of the Commission, adopted a recommendation allowing Bulgaria to
deviate from, and exceed, the recommended maximum growth rates of net
expenditure10
.
(13) Based on data validated by Eurostat11
, Bulgaria’s general government deficit increased
from 2.0% of GDP in 2023 to 3.0% in 2024, while the general government debt rose
from 22.9% of GDP at the end of 2023 to 24.1% at the end of 2024. According to the
Commission’s calculations, these developments correspond to a net expenditure
growth rate of 10.4% in 2024. In the Annual Progress Report, Bulgaria estimates the
net expenditure growth in 2024 at 12.3%. The lower net expenditure growth rate in the
Commission’s calculations is mainly due to Commission’s accounting for the
recording of a one-off expenditure in 2024. Based on the Commission’s estimates, the
9
The 2025 Annual Progress Reports are available on: https://economy-finance.ec.europa.eu/economic-
and-fiscal-governance/stability-and-growth-pact/preventive-arm/annual-progress-reports_en
10
Council recommendation allowing Bulgaria to deviate from, and exceed, the recommended net
expenditure path (Activation of the national escape clause), OJ (...)
11
Eurostat-Euro Indicators, 22.4.2025.
EN 5 EN
fiscal stance12
, which includes both nationally and EU financed expenditure, was
broadly neutral in 2024.
(14) According to the Annual Progress Report, the macroeconomic scenario underpinning
the budgetary projections by Bulgaria expects real GDP growth at 3.0% in 2025, while
HICP inflation is projected at 3.6% in 2025. The Commission Spring 2025 Forecast
projects real GDP to grow by 2.0% in 2025 and 2.1% in 2026, and HICP inflation to
stand at 3.6% in 2025 and 1.8% in 2026.
(15) In the Annual Progress Report, the general government deficit is expected to decrease
to 2.9% of GDP in 2025, while the general government debt-to-GDP ratio is set to
increase to 28.9% by the end of 2025. These developments correspond to net
expenditure growth of 8.6% in 2025. The Commission Spring 2025 Forecast projects a
government deficit of 2.8% of GDP in 2025. According to the Commission’s
calculations, these developments correspond to net expenditure growth of 9.2% in
2025. These higher projections of net expenditure growth than in the Annual Progress
Report are due to a lower projected EU funded expenditure as well as a smaller
anticipated impact of discretionary revenue measures, albeit against lower total
expenditure, in the Commission Spring 2025 Forecast for 2025. The Commission’s
recording of one-off expenditure for 2024 also contributed to this difference by
creating a lower starting base for 2024. Based on the Commission’s estimates, the
fiscal stance, which includes both nationally and EU financed expenditure, is projected
to be expansionary, by 1.1% of GDP, in 2025. The general government debt-to-GDP
ratio is set to increase to 25.1% by the end of 2025.
(16) General government expenditure amounting to 1.0% of GDP is expected to be
financed by non-repayable support (“grants”) from the Recovery and Resilience
Facility in 2025, compared to 0.4% of GDP in 2024, according to the Commission
Spring 2025 Forecast. Expenditure financed by Recovery and Resilience Facility non-
repayable support enables high-quality investment and productivity-enhancing reforms
without a direct impact on the general government balance and debt of Bulgaria.
(17) General government defence expenditure in Bulgaria amounted to 1.6% of GDP in
2021 and in 2022, and 1.5% of GDP in 202313
. According to the Commission Spring
2025 Forecast, expenditure on defence is projected at 1.4% of GDP in 2024 and 2.6%
of GDP in 2025. This corresponds to an increase of 1.2 percentage point of GDP
compared to 2024. The period when the national escape clause is activated (2025-
2028) allows Bulgaria to reprioritise government expenditure or increase government
revenue so that lastingly higher defence expenditure would not endanger fiscal
sustainability in the medium term.
(18) According to the Commission Spring 2025 Forecast, net expenditure in Bulgaria is
projected to grow by 9.2% in 2025. Based on the Commission Spring 2025 Forecast,
the net expenditure growth of Bulgaria in 2025 is projected to be above the
12
The fiscal stance is defined as a measure of the annual change in the underlying budgetary position of
the general government. It aims to assess the economic impulse stemming from fiscal policies, both
those that are nationally financed and those that are financed by the EU budget. The fiscal stance is
measured as the difference between (i) the medium-term potential growth and (ii) the change in primary
expenditure net of discretionary revenue measures and including expenditure financed by non-repayable
support (grants) from the Recovery and Resilience Facility and other Union funds.
13
Eurostat, government expenditure by classification of functions of government (COFOG).
EN 6 EN
recommended maximum growth rate, corresponding to a deviation14
of 1.1% of GDP
in 2025. However, the projected deviation is within the flexibility of the national
escape clause based on current projections for defence spending.
(19) The Annual Progress Report does not include budgetary projections beyond 2025.
Based on policy measures known at the cut-off date of the forecast, the Commission
Spring 2025 Forecast projects a general government deficit of 2.8% of GDP in 2026.
These developments correspond to net expenditure growth of 1.7% in 2026. Based on
the Commission’s estimates, the fiscal stance, which includes both nationally and EU
financed expenditure, is projected to be contractionary, by 0.8% of GDP, in 2026. The
general government debt-to-GDP ratio is projected by the Commission to increase to
27.1% by the end of 2026. The increase of the debt-to-GDP ratio in 2026 mainly
reflects a stable primary deficit above 2% and sustained disinflation over the forecast
period, paired with increasing interest rates.
Key policy challenges
(20) In accordance with Article 19(3), point (b), of Regulation (EU) 2021/241 and criterion
2.2 of Annex V to that Regulation, the recovery and resilience plan includes an
extensive set of mutually reinforcing reforms and investments to be implemented by
2026. These are expected to help effectively address all or a significant subset of
challenges identified in the relevant country-specific recommendations. Within this
tight timeframe, finalising the effective implementation of the recovery and resilience
plan, is essential to boost Bulgaria’s long-term competitiveness through the green and
digital transitions, while ensuring social fairness. To deliver on the commitments of
the recovery and resilience plan by August 2026, it is essential for Bulgaria to urgently
accelerate the implementation of reforms and investments by addressing relevant
challenges The rapid inclusion of a REPowerEU chapter in the recovery and resilience
plan is essential for the financing of additional reforms and investments in support of
Bulgaria’s and the EU’s strategic objectives in the field of energy and the green
transition. In particular, those relate to maintaining a consistent policy approach
towards implementing the envisaged structural reforms as well as ensuring
competitive and effective public procurement procedures to allow the timely
realisation of the planned investments. The systematic involvement of local and
regional authorities, social partners, civil society and other relevant stakeholders
remains essential in order to ensure broad ownership for the successful
implementation of the recovery and resilience plan.
(21) The implementation of cohesion policy programmes, which encompass support from
the European Regional Development Fund (ERDF), the Just Transition Fund (JTF),
the European Social Fund Plus (ESF+) and the Cohesion Fund (CF), has accelerated in
Bulgaria. It is important to continue efforts to ensure the swift implementation of these
programmes, while maximising their impact on the ground. Bulgaria is already taking
action under its cohesion policy programmes to boost competitiveness and growth. At
the same time, Bulgaria continues to face challenges, including those relating to
(energy) poverty and social inclusion, quality and inclusiveness of education, skills
development, labour market integration of vulnerable groups and energy transition,
which remains key to long-term resilience, and competitiveness, where further focus
on development of strategic technologies could provide new opportunities. In
14
From 2026 these figures will appear in the control account that is established in Article 22 of the
Regulation (EU) 2024/1263.
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accordance with Article 18 of Regulation (EU) 2021/1060, Bulgaria is required – as
part of the mid-term review of the cohesion policy funds – to review each programme
taking into account, among other things, the challenges identified in the 2024 country-
specific recommendations. The Commission proposals adopted on 1 April 202515
extend the deadline for submitting an assessment – for each programme – of the
outcome of the mid-term review beyond 31 March 2025. It also provides flexibilities
to help speed up programme implementation and incentives for Member States to
allocate cohesion policy resources to five strategic priority areas of the Union, namely
competitiveness in strategic technologies, defence, housing, water resilience and
energy transition.
(22) The Strategic Technologies for Europe Platform (STEP) provides the opportunity to
invest in a key EU strategic priority by strengthening the EU’s competitiveness. STEP
is channelled through 11 existing EU funds. Member States can also contribute to the
InvestEU Programme supporting investments in priority areas. Bulgaria could use
these initiatives to support the development or manufacturing of critical technologies,
including clean and resource-efficient technologies.
(23) Beyond the economic and social challenges addressed by the recovery and resilience
plan and other EU funds, Bulgaria faces several additional challenges related to the
quality of education and skills, healthcare, long-term care and social inclusion.
Additional challenges, which undermine the business environment and
competitiveness, include the functioning of the public administration, including the
independence of regulators, the effectiveness of public procurement procedures and of
the steering of research and innovation. Further challenges relate to the still high
degree of reliance on fossil fuels, persistent energy poverty, underdeveloped
sustainable transport infrastructure and poor waste and water management.
(24) As set in the Competitiveness Compass, all the EU, national, and local institutions
must make a major effort to produce simpler rules and to accelerate the speed of
administrative procedures. The Commission has set ambitious goals for reducing
administrative burden: by at least 25% and by at least 35% for SMEs; and has created
new tools to achieve these goals, including systematic stress test of the stock of EU
legislation and enhanced stakeholders’ dialogue. To match this ambition, Bulgaria also
needs to take action. 66% of businesses consider the complexity of administrative
procedures to be a problem for their company when doing business in Bulgaria16
. The
quality of services provided by the public administration remains insufficient, with
significant regional disparities. The vast majority of businesses perceive corruption to
be widespread and a problem when doing business. The other main challenges to the
business environment include the high administrative burden and regulatory barriers.
These issues could be tackled by further digitalising administrative services and
reducing the cost of starting a business. Public procurement procedures often lack
competition or quality, often leading to lack of bidders or to successful appeals.
Corruption risks in public procurement remain high, deterring businesses from
participating due to perceived bias in conditions and evaluations. Regulatory bodies
face resource limitations and are often subject to political influence, which undermines
15
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
amending Regulations (EU) 2021/1058 and (EU) 2021/1056 as regards specific measures to address
strategic challenges in the context of the mid-term review - COM(2025) 123 final.
16
‘Businesses' attitudes towards corruption in the EU’ Flash Report, Eurobarometer Report (April 2024).
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their independence and the quality of their work. Wide differences in salaries across
and between some regulators limit the scope to attract quality experts. .
(25) The level of R&D investment in Bulgaria is very low and not efficiently allocated,
leading to low impact and effectiveness, notably for public R&D. In 2023, public
R&D spending was 0.28% of GDP against the EU average of 0.72%. In addition, links
between academia and business remain limited. The low level of R&D spending is
exacerbated by public funds spread across many higher education institutions and
research organisations. These weaknesses result in low innovation output as evidenced
by the low patent intensity rate and the below-EU-average number of scientific
publications, citations and public-private scientific co-publications.
(26) Accessing clean and affordable energy and reducing the reliance on fossil fuels
continue to be priority issues for Bulgaria. The country had the fourth-highest
wholesale electricity prices in 2024, partially due to continued reliance on fossil fuels,
accounting for approximately 25% of electricity generation, the limited availability of
non-fossil flexibility technologies, as well as limited interconnectivity between South-
Eastern and Central Europe. The postponed reform of the retail electricity market
liberalisation impedes the transition to clean and affordable energy as the lack of
exposure to price signals drives demand up, in particular in peak hours, where it is met
by marginal fossil fuel power plants. Bulgaria records sizeable fossil-fuel subsidies,
representing approximately 0.82% of its GDP, with no phase-out planned before 2030.
In particular, fossil-fuel subsidies that neither tackle energy poverty in a targeted way
nor address genuine energy security concerns could be considered a phase-out priority.
In Bulgaria, fossil fuel subsidies, such as feed-in-tariffs for combined heat and power
plants, as well as the new State order to purchase electricity from the ‘Maritsa East II’
thermal power plant are economically inefficient, perpetuate reliance on fossil fuels
and disincentivise the decarbonisation of the power and heating sectors.
(27) The uptake of renewable energy has slowed down in Bulgaria. In 2024, the country
added 1 GW of new renewable energy capacity (mostly solar photovoltaics), down
from 1.2 GW the previous year. Complex and lengthy permitting procedures create
obstacles to installing new onshore wind capacity, evidenced by the lack of new
capacities in recent years. The potential of offshore wind installations remains
untapped due to the lack of a regulatory framework, in particular to designate go-to
areas and provide a grid development plan for coastal areas. Although Bulgaria created
a legal basis for designating go-to areas for wind installations in 2023 as part of a
reform under the RRP, it still has not designated these areas.
(28) District heating systems in Bulgaria are often in poor technical condition and most run
predominantly on natural gas or coal.
(29) The insufficient short-term storage capacity and the need to rely on fossil-fuel
generators result in one of the highest wholesale price swings in the EU with a daily
average wholesale price variation of EUR 185/MWh in 2024. Limited liquidity on the
wholesale market due to the partial liberalisation and the compensation scheme for
business users have long impeded aggregation and demand-response potentials,
decreasing the flexibility of the electricity system. Furthermore, the lack of full retail
market liberalisation will continue to undermine the flexibility of the electricity
system.
(30) Bulgaria’s grid connection capacity for renewable energy installations is increasingly
limited, especially at distribution level, requiring additional investment in the network
to manage the continuous integration of renewables.
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(31) Energy poverty remains a structural challenge, with the proportion of people unable to
keep their homes adequately warm still above the EU average. Although Bulgaria
adopted a legal definition of energy poverty in 2023 as part of a reform under the
RRP, it still needs to identify the affected population and to design effective and
targeted support schemes.
(32) The energy intensity and the energy-related greenhouse gas emissions of
manufacturing in Bulgaria remain among the highest in the EU. The energy intensity
of manufacturing fell between 2017 and 2022 to 2.45 GWh/EUR of gross value added
(GVA) but remains significantly higher than the EU average (1.05 GWh/EUR of
GVA). Promoting energy efficiency in manufacturing – particularly in energy-
intensive sectors – and cutting industrial energy use would contribute to productivity
and competitiveness gains for the economy.
(33) Transport is the sector that generates the most emissions in Bulgaria with greenhouse
gas emissions from road transport significantly increasing between 2005 and 2023,
while they decreased in the EU overall. Further action is needed to incentivise the
uptake of clean transport in Bulgaria, such as greater promotion of public transport, for
instance by rolling out the single ticket service for public transport, by modernising the
railway infrastructure and electrifying the remaining railway lines, developing cross-
border rail connectivity, installing electric vehicle charging infrastructure and
implementing low-emission zones in urbanised areas.
(34) Sustainable water and waste management remains a challenge in Bulgaria. It still has
limited institutional capacity to tackle these challenges. More action is needed to
strengthen coordination between the competent national authorities, develop
monitoring and modelling tools, and improve reporting and planning at subnational
level. The investment gap in water management to meet the requirements of the Water
Framework Directive and the Floods Directive is estimated at EUR 439 million per
year.
(35) A high share of high school students lacks basic skills in mathematics, reading and
science, which poses a significant barrier for later skills development. In the 2022
OECD Programme for International Student Assessment (PISA), about half of
Bulgarian 15-year-olds underperformed in mathematics, in reading and in science,
with even higher rates among students from disadvantaged backgrounds.
Underperformance is also linked to the school curricula, which are still heavily
knowledge-based. There is an insufficient use of competence-based, learner-centred
approaches, with too little focus on basic skills development and on STEM
competences. Teaching quality suffers from the inability to attract talent to the
profession, partly due to a lack of continuous professional development and training
tailored to teachers’ needs. Major inequalities based on socio-economic factors persist
with a high degree of social segregation affecting schools and exacerbating learning
inequalities.
(36) The Bulgarian labour market remains tight with a low unemployment rate at 4.2% in
2024 and employers reporting a total need of over 260 000 additional workers, which
is roughly 9% of the persons currently in employment. Although the share of young
people (15-29) neither in employment nor in education and training fell, it is still
1.7 pps above the EU average. Despite slight improvements in 2024, the gap in the
employment of people with and without disability remains one of the highest in the
EU at 35.4 pps in 2024. The employment rate for people with no more than a lower-
secondary education is 42 pps lower than for people with a tertiary education, a
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significantly higher gap than on average in the EU. Furthermore, the Roma face
substantial challenges in finding work with only 47% in employment. Recent positive
net migration flows are insufficient to offset the declining labour force and emigration
of high-skilled young workers. These labour market challenges are exacerbated by
workforce skills shortages and mismatches. Digital skills among the working
population remain significantly low with 40.1% of workers (aged 25-64) having at
least basic digital skills. Moreover, skills shortages are exacerbated by the low degree
to which VET and tertiary education meets the needs of the labour market, especially
in sectors relevant to the green and digital transition. Furthermore, Bulgaria has
reported one of the lowest levels of adult participation in learning in the Union over
the last decade, standing at 9.5% in 2022 compared to an EU average of 39.5%.
(37) The risk of social exclusion and poverty remains high in particular for children, older
people, persons with disabilities, and Roma. Expenditure on social protection benefits
in Bulgaria is among the lowest in the EU (18.3% against the EU average of 26.8% of
GDP in 2023), particularly for social assistance, family and unemployment benefits.
The adequacy of minimum income is well below the EU average (19.1% vs. 56.3% of
the poverty threshold in 2023). Only 25.1% of short-term unemployed received
benefits in 2024. The system’s limited capacity to reduce poverty highlights the need
to improve efficiency, coverage and effectiveness. In 2024, social transfers (excluding
pensions) reduced poverty by just 27.7%, below the EU average of 34.4%. Addressing
these challenges would also contribute to supporting upward social convergence, in
line with the Commission services’ second-stage country analysis of the Social
Convergence Framework17
.
(38) Despite increases in healthcare spending since 2019, mortality from treatable causes
has not decreased in Bulgaria, and remained more than twice the EU average, which
indicates inefficiencies in the healthcare system. Despite a recent decrease of the
proportion of out-of-pocket payments for healthcare, it remains the highest in the EU.
The number of nurses and general practitioners in Bulgaria fell again in 2023. There is
now an average of less than one nurse per doctor and the share of practising nurses per
1 000 population remains among the lowest in the EU, which undermines access to
and the quality of medical services. In 2023, over 40% of nurses and 50% of doctors
were aged 55 and over, which combined with the concentration of workforce and
facilities in urban areas, undermines access to health services in the long-term.
HEREBY RECOMMENDS that Bulgaria take action in 2025 and 2026 to:
1. Reinforce overall defence spending and readiness in line with the European Council
conclusions of 6 March 2025. Adhere to the maximum growth rates of net
expenditure recommended by the Council on [date], while making use of the
allowance under the national escape clause for higher defence expenditure.
2. In view of the applicable deadlines for the timely completion of reforms and
investments under Regulation (EU) 2021/241, urgently accelerate the
implementation of the recovery and resilience plan. Accelerate the implementation of
cohesion policy programmes (ERDF, JTF, ESF+, CF), building, where appropriate,
on the opportunities offered by the mid-term review. Make optimal use of EU
instruments, including the scope provided by the InvestEU and the Strategic
Technologies for Europe Platform, to improve competitiveness.
17
SWD(2025) 95 – Second-stage country analysis on social convergence in line with the Social
Convergence Framework (SCF), 2025.
EN 11 EN
3. Create the enabling conditions to boost competitiveness by improving the
functioning and the capacity of the public administration, including at regional level.
Simplify regulation, improve regulatory tools and reduce administrative burden to
create a level playing field for business. Improve the effectiveness of anti-corruption
measures, particularly in high-level corruption cases. Improve the quality of public
procurement procedures and strengthen the independence and functioning of
regulators. Increase the impact and effectiveness of public R&D investment by
focusing research and innovation in fewer institutions and improve the
commercialisation of research output.
4. Reduce reliance on fossil fuels, including by promoting market liberalisation,
accelerating the roll-out of renewables, particularly by designating areas with fast-
track permitting for wind installations. Take specific steps to phase out fossil-fuel
subsidies including by removing the subsidies supporting coal-based electricity
production and district heating. Increase the flexibility of the electricity system to
reduce wholesale price volatility, in particular by broadening the scope for
aggregation and demand-response and by ensuring sufficient storage capacities.
Upgrade the electricity grid infrastructure at distribution level by rolling out smart
grid infrastructure and by upgrading lines and substations. Tackle energy poverty by
developing an up-to-date information system on energy-poor and energy-vulnerable
households and supporting them with targeted policy measures. Encourage energy
efficiency measures in industry. Promote the roll-out and uptake of sustainable
urban, public and rail transport, including by accelerating the development of the
necessary infrastructure. Improve water and waste management by tackling
institutional weaknesses and investing in infrastructure to ensure the sustainable use
of resources.
5. Strengthen competence-based teaching and learning. Improve teaching quality with
initial, continuous and needs-based teacher training. Improve the quality, labour
market relevance and inclusiveness of education and training, including for Roma
and other disadvantaged groups. Address labour shortages, by effectively
implementing measures to increase the employment level of persons with disabilities,
people with a lower level of education, Roma and inactive persons. Reinforce skills
acquisition to boost competitiveness and support the green and digital transition.
Address social inclusion by improving access to integrated employment and social
services, and by providing more effective minimum income support. Improve access
to health services, including by reducing out-of-pocket payments and tackling the
shortages and uneven distribution of health professionals with a view to boosting the
effectiveness, accessibility and capacity of the health system.
Done at Brussels,
For the Council
The President