EditBulgaria’s 2026 budget on hold after mass protest over soaring public spending
The authorities felt cornered - not only by political opposition and economic critics, but by genuine public mobilisation
Shaken by the largest protest in Sofia in the past decade, Bulgaria’s four-party governing coalition announced that it is freezing its proposal for the 2026 state budget, which has faced sharp criticism from civil society and the business community. Since the draft budget has already cleared its first reading, it cannot simply be withdrawn. Instead, it has been put on hold until the ruling majority decides how to amend it between the two readings.
The news was first delivered by Boyko Borissov, leader of GERB – the political force whose mandate underpins the current government. After weeks of intransigence and a marked refusal to engage in dialogue, Borissov said on Thursday morning that “until everyone sits down and agrees on how the country will be governed in the coming years, we will work with the old budget”.
The authorities felt cornered – not only by political opposition and economic critics, but by genuine public mobilisation. More than 20,000 citizens filled Sofia’s “Independence” Square on Wednesday in the biggest protest since 2013-2014.
Borissov, now positioning himself as a moderator, had defended the budget only days earlier as a “coalition” document that would raise citizens’ incomes. Following the protest, however, he has claimed that he does not support it and would listen “even if only one person protests”.
The decision to freeze the budget comes just five weeks before Bulgaria is due to formally join the eurozone.
It remains unclear what adjustments will be made to expenditure and revenue. Prime Minister Rossen Zhelyazkov has once again invited employers’ organisations and trade unions for talks in an attempt to reach an agreement this time. “On the eve of entering the eurozone, we need stability and confidence,” he said.
Sofia erupts: largest protest in years blocks parliament over “worst budget in a generation”
A political insurance policy
No major actor supported the 2026 budget – neither the parliamentary opposition, nor businesses, nor trade unions in one of the EU’s poorest member states.
The European Commission, financial experts and analysts, and even some within the ruling coalition criticised the government for lifting public spending to a record 45% of GDP. These spending levels reflect the chronic ailments of Bulgarian democracy: lack of justice, oligarchic interests, and opaque public finances that conceal corruption.
For the GERB-SDS, BSP, “There Is Such a People” and DPS-New Beginning majority, this was “the possible budget”, as both the prime minister and Finance Minister Temenuzhka Petkova described it.
“The good thing about this budget is that the next one will be better,” said Delian Dobrev, chair of the parliamentary budget committee (GERB).
The liberal We continue the change – Democratic Bulgaria (PP-DB) opposition coalition described it as “the most left-wing budget of the past 20 years” due to its increased burden on the private sector. The state selectively boosts certain groups, such as the security services and public administration, at the expense of businesses and citizens – in effect “buying” votes ahead of next year’s elections with taxpayers’ money.
The draft framework envisaged rising public debt, driven by persistent deficits and recapitalisation of state-owned enterprises, creating risks for long-term fiscal sustainability. By 2028, debt in absolute terms would nearly double compared with the end of 2024 – reaching €49 billion versus around €25 billion (though remaining at 36.6% of GDP versus 24.1%).
Nonetheless, the coalition proposed increasing the ceiling on state guarantees for next year by €2 billion – from €3.8 billion to €5.8 billion – to finance the acquisition of Lukoil’s Bulgarian assets, including the largest refinery in the Balkans, more than 220 petrol stations, the product pipeline and tax warehouses.
Bulgaria moves to enable state takeover of Lukoil assets with fresh budget amendments
Budget planners continued their practice of optimistic revenue projections, particularly for VAT receipts, which are crucial for the budget. Despite forecasting a 30% increase for 2025, the government acknowledged a €1.5 billion shortfall. The same growth rate is planned for 2026, though financial experts remain sceptical.
The European Commission has warned that Bulgaria risks breaching EU fiscal rules in 2026, with spending projected to grow faster than permitted, and called for tighter control. The Commission’s autumn European Semester package indicates that Bulgaria, Hungary and Spain face risks of non-compliance with the Council’s budget requirements for 2026 due to their net expenditure plans. Structural weaknesses – low productivity, an ageing population and insufficient strategic investment – remain.
Opposition radicalises
The government broke off all dialogue on the budget and its policies, submitting it to parliament without approval from the National Council for Tripartite Cooperation, which represents employers’ groups and trade unions – an unprecedented step. The opposition responded with radicalisation.
The 26 November protest in Sofia’s “Independence” Square became one of the largest displays of civic discontent in years, gathering thousands from diverse groups – entrepreneurs, workers and civic activists. Organised by the opposition PP-DB, the demonstration was supported by the Association of Industrial Capital and several business organisations, as well as smaller parties.
The anger stemmed not only from plans to raise social contributions by more than 10% (2 percentage points) and to increase dividend tax by 10% next year, but also from what protesters saw as the government’s arrogant behaviour and refusal to compromise or engage constructively.
“Never before has a budget been adopted with such a lack of dialogue,” commented Vice-President Iliana Yotova. The most aggressive defence of the budget came from MPs of DPS-New Beginning, led by Delyan Peevski, sanctioned for corruption by both the US and the UK; his image featured prominently on the protesters’ placards.
The government appears to nurse the illusion that well-funded police and security services can guarantee its political longevity. Hundreds of police officers can protect parliament and state buildings with their bodies and batons, and the anti-corruption commission can strike whomever it is instructed to, but history shows that civic protests can topple governments.
The major challenge now for PP-DB is whether the liberal-conservative coalition can offer a viable governing alternative – and with whom it might ally. Protesters on Wednesday urged former gambling tycoon Vasil Bozhkov to leave the rally, rejecting his call for broad opposition unity. Others, chanting “Go away, rouble-lover!”, directed their anger at Slavi Vassilev, a political analyst close to the president, who also appeared at the demonstration.
Amid chants of “Mafia!” and “Resign!” in the so-called “triangle of power”, the leaders of “We Continue the Change” and “Democratic Bulgaria” have so far refrained from demanding the government’s resignation. “People are angry and want to reclaim their captured state,” said Ivaylo Mirchev, co-chair of Democratic Bulgaria. The withdrawn budget appears to be the first successful step.
Caption: Prime Minister Rosen Zhelyazkov defended the budget step-back, warning of a “political spiral of uncertainty”. [Dnevnik.bg]
Updated: November 28, 2025 - 06:41
