Bulgaria: The Bulgarian government has withdrawn its controversial 2026 draft budget after nationwide protests erupted over proposed tax hikes and social-security increases. The decision marks a dramatic reversal for the minority cabinet, which had positioned the draft as Bulgaria’s first-ever budget prepared in euros ahead of the country's planned eurozone entry on January 1, 2026.
Prime Minister Rosen Zhelyazkov’s administration formally requested parliament to scrap the budget proposal, signaling the start of a fresh round of fiscal planning. The draft, approved on first reading by a parliamentary committee on November 18, had faced escalating public pressure as criticism over new tax burdens gained momentum.
Officials acknowledged that the level of public discontent made it politically impossible to move forward. The government has now committed to re-introducing a revised plan once lawmakers consent to the withdrawal.
Monday night saw massive demonstrations across Sofia and other major cities, with citizens demanding immediate cancellation of the budget. Protesters criticized the plan’s increase in social-security contributions and dividend taxes, arguing that it would strain households already grappling with rising living costs.
The protests also exposed deeper frustrations over long-standing political corruption, perceived lack of transparency in fiscal governance, and growing scepticism about the upcoming transition to the euro.
Bulgaria’s move to prepare its first euro-based budget amplified public unease. Surveys show that around half the country opposes shifting from the lev to the euro, fearing price hikes, inflationary pressure, and loss of economic independence.
Economists note that the protests were not merely about taxes but about broader insecurities tied to the rapid pace of Bulgaria’s financial and political reforms ahead of eurozone integration.
Government officials have warned that postponing the budget could endanger essential social welfare schemes. Deputy Labour Minister Ivan Krastev urged all parties to work together to ensure pension payments, social benefits, and support for vulnerable communities are not disrupted during the transition period.
Krastev emphasized that political consensus is urgently needed to prevent low-income groups from bearing the brunt of the fiscal uncertainty.
As the cabinet prepares to draft a new fiscal plan, it faces mounting scrutiny from trade unions, business associations, opposition parties, and civil society groups. The new proposal is expected to undergo intense debate, particularly on tax reforms, expenditure transparency, and safeguards for economic stability during euro adoption.
Political analysts warn that the process of revising the budget will likely be turbulent, with heightened expectations from a public newly energized by protest movements.
The withdrawal of the 2026 draft budget marks a significant moment in Bulgaria’s economic and political trajectory highlighting the delicate balance required to implement major reforms in a landscape shaped by public sentiment, economic uncertainty, and transformative national goals.