Shuleva warns Bulgaria risks debt spiral, eurozone fallout

Former Social Minister Lidiya Shuleva warned that reckless public spending could trigger high inflation and tax increases similar to those in Romania and Greece. She criticized politicians seeking popular support through unsustainable fiscal policies, stating elected officials must prioritize financial stability over winning favor. Shuleva emphasized that citizens will ultimately pay for such short-term political strategies.

The government faces an October deadline to submit the 2026 budget draft to parliament. Bulgaria violates fiscal stability requirements for the first time in 25 years with its 2025 budget, which pushes total expenditures to 44 percent of GDP compared to the traditional 37 percent ceiling. The Public Finance Act mandates a 40 percent limit that remained intact for two decades.

Shuleva noted that Bulgaria met eurozone indicators for 2024, but raised concerns about 2025 figures submitted without an adopted budget. She cautioned against repeating mistakes from the Viden government bankruptcy when socialists channeled excessive funds into state enterprises. The minister identified reserves in the euro-transition budget and highlighted pension system inefficiencies for working retirees in desk positions.