Europe 2020 in Bulgaria

The Country-specific Recommendations are documents prepared by the European Commission for each country, analysing its economic situation and providing recommendations on measures it should adopt over the coming 18 months. They are tailored to the particular issues the Member State is facing and cover a broad range of topics: the state of public finances, reforms of pension systems, measures to create jobs and to fight unemployment, education and innovation challenges, etc. The final adoption of Country-specific Recommendations prepared by the Commission is done at the highest level by national leaders in the European Council.

Country overview

Bulgaria faces a set of interrelated policy challenges to achieve sustainable, robust growth and has been identified by the European Commission as experiencing macroeconomic imbalances. These relate in particular to external indebtedness, corporate sector deleveraging and the labour market.

The government has ensured financial stability and fiscal consolidation by out-performing its fiscal targets. The government has managed to achieve its medium-term objective for public finances, despite the slow economic recovery. In addition, the authorities took some steps towards improving tax collection and are currently implementing a major reform of the pension system.

Despite the progress the government has made in implementing its fiscal agenda, the most pressing challenges for the country have remained broadly unchanged since 2012: the labour market, education, health care, the business environment, public procurement, energy and resource efficiency. A persistent lack of institutional capacity is causing critical delays in implementing the necessary reforms and in absorbing EU funding, which could help support the reforms.

2013 European Commission's recommendations for Bulgaria in brief

The Commission has issued seven country specific recommendations (CSRs) to Bulgaria to help it improve its economic performance. These are in the areas of:

  1. Sustainable public finances
    Bulgaria's public finances are strong overall. Maintaining this sound fiscal framework is a condition for delivering on the important reform agenda which must be pursued in the coming years. Improving tax collection would allow Bulgaria to support necessary growth-enhancing expenditure.
  2. Retirement reform
    Bulgarian workers leave the job market earlier than the EU average. Ensuring the adequacy of pension provision - and increasing the supply of labour – depends on further measures to encourage Bulgarians to contribute to the system over longer working lives.
  3. Employment and social inclusion
    The labour market is suffering from structural challenges with regional and skills mismatches among the highest in the EU. As a result, Bulgaria's employment rate continues to drop, and unemployment has doubled since 2008. Active labour market policies and a well-functioning Employment Agency are needed to help people, particularly the young and other vulnerable groups to find a job. With the highest rate of citizens at risk of poverty in the EU, Bulgaria should also give priority to implementing a comprehensive strategy for social inclusion.
  4. Education and healthcare
    The low quality of education at all levels has an important negative effect on the economic potential of Bulgaria. The Commission recommends that ambitious reforms are agreed and implemented as a priority. Moreover, Bulgaria's health care system has considerable potential for increasing its efficiency, which would improve the quality of the services it delivers and thereby the population’s overall health.
  5. Business environment
    Bulgaria's growth and employment prospects are significantly hindered by the framework conditions for doing business. The efforts to reduce the administrative burden on companies and restore normal lending to SMEs should be emphasised. Improving the quality and independence of the judiciary system, and effectively tackling corruption are further necessary steps to increase investor confidence.
  6. EU funds and public procurement
    Less than 30% of the EU funds made available to Bulgaria since 2007 have been successfully put to use. The effective deployment of these resources on quality projects is crucial for sustaining necessary public investment. To increase investment, while avoiding irregularities, the relevant legislation should be fully enforced.
  7. Energy reform
    Bulgaria is still to implement fully the internal energy market, is highly dependent on few external sources and has the highest energy intensity in the EU. The energy system should be modernised in order to deliver more competitive and secure energy at a lower cost to citizens, businesses and the environment.

See how Bulgaria compares with other EU Member States in key areas

European Semester Documents