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European Commission freezes funding for Bulgaria

European Commission freezes funding for Bulgaria
02 December 2024

Bulgaria will not receive the second €653 million disbursement from the EU’s Recovery and Resilience Facility due to delays in implementing key reforms. This decision, announced by the European Commission, stems from Bulgaria's failure to meet commitments on energy market liberalization, anti-corruption measures, and public procurement reforms - a direct result of the political crisis in the country that has been going on for four years.

The European Commission has given Bulgaria one month to respond to its preliminary assessment, after which the payment will remain suspended for up to six months unless sufficient progress is made. If Sofia's institutions do not implement the necessary reforms within the time given, the Commission could decide to fully cut Bulgaria's recovery plans.

Bulgaria is entitled to €5.69 billion in EU grants under the Recovery and Sustainability Plan. The country has only received €1.37 billion, the first payment. If the plan had been implemented on time, Bulgaria would have received a total of €4.3 billion by now. The freeze puts additional pressure on Bulgaria’s already strained 2024 budget. The government is working to limit its budget deficit to 3% of GDP to qualify for eurozone membership in 2025.

Several reform commitments remain unfilled, including:

  • The Bulgarian parliament has not liberalised the energy market as promised to Brussels. Local politicians feared a sharp rise in household electricity, and maintained full state regulation. 
  • Another unfulfilled promise is promoting electricity generation from renewable energy sources (RES), currently the target of attacks by pro-Russian propaganda on Bulgarian social media.
  • Plans to close coal-fired power plants by 2038 remain stalled. In a recent parliamentary session, MPs from the pro-Russian Revival party and the populist "There Is Such a People" party disrupted proceedings, blocking a resolution on climate neutrality.
  • Bulgaria also failed to adopt the necessary anti-corruption reforms, with no new president or members of the new anti-corruption commission elected.

Deputy Prime Minister and Finance Minister Lyudmila Petkova has warned that Bulgaria risks losing billions in EU funds, potentially derailing its eurozone ambitions. The situation also threatens the country’s economic stability, with serious implications for its national budget.

Adding to the challenges, Bulgaria is the only EU member state that has not submitted its plan under the RePowerEU chapter, which provides funding to reduce energy dependence on Russia. Without decisive action, Bulgaria faces significant financial losses and continued political and economic uncertainty.

B2EU closely monitors any news concerning EU funding. Follow our page to stay informed. 

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