Bulgarian Lawmakers Move to Raise Debt Ceiling

Jerusalem, 10 June, 2026 (TPS-IL) -- Sofia (BTA) – The Bulgarian Parliament on Wednesday approved at first reading amendments to the so-called budget extension law (formally the Act on the Collection of Revenues and the Commitment of Expenditures in 2026 until the Passage of the 2026 State Budget Act, the 2026 Public Social Insurance Budget Act and the 2026 National Health Insurance Fund Budget Act), allowing the government to issue up to EUR 3.8 billion in new debt.

The bill was backed by 135 MPs from Progressive Bulgaria and the Movement for Rights and Freedoms, while 29 lawmakers from Democratic Bulgaria and Vazrazhdane voted against it. Another 29 MPs from GERB-UDF and Continue the Change abstained. MPs set a five-day deadline for proposals between the first and second readings.

According to the Council of Ministers, which submitted the bill, the amendments are intended to address gaps in the current legislation until a regular State Budget Act is adopted. The future budget law will define the specific borrowing limits for 2026, including the maximum level of state debt at year-end and the amount of new debt that may be incurred during the year, in line with the overall fiscal framework.

The amendments would allow the government to issue new debt on international capital markets through its medium-term debt issuance programme, as well as short-term government debt, up to a total of EUR 3.8 billion to be repaid by the end of the current budget year.

According to the bill’s sponsors, the measure would help mitigate potential budgetary risks arising from temporary liquidity shortages caused by mismatches between the timing of revenues and expenditures, while ensuring that short-term obligations are financed in a timely and full manner.

The amendments would also authorize the government to negotiate and sign, subject to subsequent parliamentary ratification, a EUR 3.2617 billion loan agreement with the European Commission under the Security Action for Europe (SAFE) instrument, which aims to strengthen the European defence industry.

According to data from the Bulgarian National Bank, the deposits managed by the Finance Ministry stood at EUR 4.4 billion as of May 31, 2026, the parliamentary Committee on Budget and Finance noted in its report. Of that amount, EUR 2.4 billion was held in the State Fund for Guaranteeing the Sustainability of the State Pension System, commonly known as the Silver Fund.

This leaves around EUR 2 billion in available resources to cover all government payments, including pensions, spending by primary budget holders, transfers to municipalities and expenditures under the Recovery and Resilience Facility.

The committee report notes that, given the expected peak in payments under the National Recovery and Resilience Plan (NRRP) between June and August 2026, linked to major capital investments in sectors such as energy, transport and social services, the budget balance for June is again expected to be negative. This would further reduce the resources available for government payments through the Bulgarian National Bank by June 30, 2026.

Last week, during the second reading of amendments to the budget extension law, the parliamentary majority from Progressive Bulgaria withdrew its proposal to raise the debt ceiling. Later the same day, however, the Council of Ministers approved a separate bill providing for an increase in the debt ceiling by up to EUR 3.8 billion.