The Council of Ministers has approved the draft state budget for 2026, with Finance Minister Galab Donev saying the proposal now moves to the National Assembly for detailed debate and amendments, where he expects “serious, responsible and meaningful work” on its final shape.
Presenting the main parameters after the cabinet meeting, Donev said discussions with social partners highlighted the need for clearer breakdowns of operating and capital expenditures, which had become a focal point of political and public scrutiny.
Operating (maintenance) expenditures for 2026 are set to increase by more than EUR 1.03-1.34 billion compared to the 2025 budget, depending on calculation frameworks, with the rise driven by both European and national financing. Of this increase, hundreds of millions come from EU funds, while the rest is covered by the national budget.
A significant share of the additional spending is allocated to previously committed or unavoidable costs. These include funds linked to elections, major public events, infrastructure obligations, and arrears from earlier years. The package also covers payments connected to road maintenance, court settlements, and delayed contractual obligations, some of which include interest and legal costs.
Among specific allocations cited are EUR 30 million for a Christmas supplement, EUR 8-8.1 million for compensation to parents whose children were not admitted to kindergartens, EUR 2.5 million for school transport compensation due to higher fuel costs, and EUR 170 million for agricultural support. Defense spending rises by around EUR 80.9 million in line with NATO commitments.
Capital expenditures show an even sharper increase, rising by approximately EUR 2.487 billion compared to 2025. Of this, EUR 1.856 billion is expected from European funding, while EUR 631 million comes from the national budget. A major portion is directed toward municipal investment programs, infrastructure projects, and payments linked to previously delayed or incomplete public works.
Donev stressed that municipal investment financing was being structurally adjusted, noting that previous budgets left some programs underfunded or without clear allocation, resulting in accumulated unpaid projects. He also pointed to reductions in certain capital expenditures at ministry level due to contract indexation rules and attempts to optimize spending across government departments.
At the same time, capital allocations include funds for defense modernization and ongoing obligations under major infrastructure agencies and state enterprises. The total planned capital spending with European financing reaches over EUR 5.3 billion, including both operational and structural programs.
The Finance Minister also warned that failure to absorb EU funds on time could force either national financing of completed projects or the return of unused European resources, urging full administrative mobilization for implementation deadlines.
He further noted that a portion of newly recorded expenditures stemmed from decisions taken by previous administrations, arguing that some costs now appeared in the 2026 framework because they were deferred or not fully accounted for earlier.
Responding to criticism and comparisons circulating publicly, Donev said that simplified interpretations of budget figures could be misleading, stressing that accounting structures and program classifications differed significantly between draft versions and final calculations.
He also highlighted a shift in fiscal management practice, saying the government is moving away from delaying certified but unpaid obligations into future years. According to him, the previous model of managing liabilities has reached its limits and requires structural change.
Concluding his remarks, Donev underlined that the 2026 budget reflected both rising mandatory expenditures and a recalibration of fiscal policy, adding that the coming parliamentary debate would be decisive for its final form and implementation framework. (Novinite)