Bulgaria’s cabinet asks EC for derogation from deficit rule, intends boosted defence spending

Sofia: At a regular meeting on April 30, Bulgaria’s Cabinet approved a decision to request the European Commission (EC) to activate for Bulgaria a national derogation clause provided for in the Stability and Growth Pact, with the government intending to use the derogation clause in connection with intended increased defence spending.

A Bulgarian government statement said that the decision is tied to the strategic need for the EU to increase its defence capacity in the context of heightened geopolitical tensions and threats to European and global security.

The decision is also in line with the priorities in the 2025-2029 governance programme, related to ensuring national security and defence and protecting national interests through active participation in Nato and the EU, building cybersecurity systems and countering foreign interference in the information space, as well as developing the production capacity of the defence industry, the statement said.

It said that the Cabinet decision also follows from the EC’s White Paper on European Defence Capabilities, as well as from the EC Communication on the inclusion of defence spending in the Stability and Growth Pact.

The EC proposes, in view of the exceptional geopolitical situation, to allow EU member states to increase defence spending by up to 1.5 per cent of GDP compared with the reference year 2021 through a coordinated activation of the national derogation clause for a period of four years, starting in 2025.

“Bulgaria will apply the national derogation clause for defence spending, measured by the Classification of Functions of Government (COFOG), in the amount of up to three per cent of GDP for the years of its operation in order to preserve the predictability and sustainability of public finances and compliance with the rules of the European economic governance framework and national fiscal rules,” the statement said.

It said that the activation of such a clause is in line with European and national strategic goals and priorities and brings tangible benefits to the country’s security and defence capabilities.

The Cabinet authorised the Minister of Finance to sign on behalf of Bulgaria and send a letter to the Council of the European Union and the EC requesting the activation of such a national derogation clause for Bulgaria.