European Commission Partially Approves €1.6 Billion Payment to Bulgaria, Withholds Funds Over Two Milestones

The European Commission is signaling a potential partial withholding of funds for Bulgaria from the third installment under the Recovery and Resilience Mechanism (RRM). While the specific sum has not been disclosed, the preliminary assessment has been sent to the Economic and Financial Committee, which has four weeks to provide its opinion before the Commission can finalize the payment decision.

The third payment request, totaling €1.6 billion, was submitted by Bulgaria on October 1. The Commission acknowledged that the country has successfully implemented 22 reforms and 19 investments, covering key sectors including the green and digital transitions, research and innovation, healthcare, social protection, sustainable transport, and the modernization of businesses. Overall, Bulgaria has met 48 of the 50 milestones and objectives linked to the third tranche.

Despite this progress, two milestones remain unresolved. One concerns the reform of the Anti-Corruption Commission, which differs from the stage tied to the second payment, when €214.5 million was temporarily withheld for the same reason. The second unmet milestone involves the enactment of legal provisions regarding criminal proceedings and the accountability and criminal liability of the Prosecutor General.

The Commission emphasized that partial withholding is a temporary measure, designed to allow Bulgaria to address the outstanding requirements while continuing to receive funding for milestones already achieved. Bulgaria has one month to respond to the Commission’s assessment. If the milestones remain unfulfilled after the review, the EC may again temporarily suspend part of the payment, granting the country six months to complete the reforms. Once the remaining requirements are met, the withheld portion will be released.

The preliminary evaluation has been shared with the Economic and Financial Committee, which will review it and provide feedback within a four-week period. The full payment decision will follow after consideration of the committee’s opinion and Bulgaria’s response.

The approved portion of the €1.6 billion tranche is a crucial step in supporting Bulgaria’s economic growth and implementing reforms that benefit both citizens and businesses. However, the two remaining milestones, anti-corruption reforms and measures on the Prosecutor General’s criminal liability, remain a key condition for the complete release of funds.