Will Bulgaria Miss Out on €653 Million? Urgent Reforms Needed to Secure Payment from the EU

Acting Deputy Prime Minister and Finance Minister Lyudmila Petkova has raised concerns that Bulgaria might not receive the full second payment of 653 million euros under the Recovery and Resilience Plan (RRP). Petkova shared this warning during a parliamentary hearing, highlighting that several key commitments have yet to be fulfilled.

Among the outstanding commitments are the adoption of the Law on Bankruptcy of Individuals, the Law on the Protection of Whistleblowers, procedural rules for the Anti-Corruption Commission, revisions to the Codes of Ethical Behavior for Bulgarian Judges, Prosecutors, and Investigators, as well as updates to the Road to Climate Neutrality card. Petkova urged legislators to address these legislative changes promptly to avoid potential financial penalties.

The European Commission is expected to review Bulgaria's progress on the second payment in mid-2024. Bulgaria will have six months to report on the implementation of these reforms. Failure to provide evidence of the reforms could result in financial corrections, possibly affecting the total amount received.

The deadline for Bulgaria to submit requests for modifications to the Recovery and Resilience Plan is September 11. The government plans to request a reduction in the commitment to cut carbon emissions from electricity production by 40% by 2025. Additionally, Bulgaria will seek to delay the proposed separation of "Bulgartransgaz" and the Electricity System Operator from the Bulgarian Energy Holding. Energy Minister Vladimir Malinov expressed concerns that such a separation could jeopardize the financial stability of the holding and necessitate renegotiations with bondholders.

Former Finance Minister Asen Vassilev has warned that Bulgaria could lose 1 billion leva if the necessary reforms for the second tranche of the RRP are not implemented. If Vassilev's prediction holds, Bulgaria might receive only 279 million leva.

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