Bulgaria Faces Loss of EU Recovery Money amid Stalled Reforms

Bulgaria risks forfeiting a substantial portion of funding under the Recovery and Resilience Plan as reforms remain stalled and political decisions continue to be postponed. At a time when the cost of services is steadily increasing, the absence of tangible progress in the energy sector and in tackling corruption is preventing the country from narrowing the gap with more developed European economies. This assessment was presented by former Deputy Prime Minister in charge of European funds Atanas Pekanov in Nova TV’s morning programme.

Pekanov described the state of the Recovery and Resilience Plan as alarming. He said that of the 84 remaining measures linked to the fourth and fifth tranches expected this year, only one has been completed so far. With the plan set to expire at the end of the summer, any reforms not implemented by then will be lost permanently. According to him, Bulgaria faces a real danger of missing out on a significant share of the 2.5 billion euros still at stake. He identified stalled reforms in the energy sector, delays in electricity market liberalization, and unresolved issues related to coal-fired power plants as the main bottlenecks.

Commenting on Bulgaria’s path towards joining the eurozone, Pekanov said the process itself is advancing without major obstacles, but practical problems remain. He pointed to technical and logistical shortcomings, including difficulties with ATM services and cash deposits, as evidence that Bulgaria’s banking system is lagging behind in digitalization compared to countries such as Austria. He warned that the sharpest price pressures are being felt in the services sector, noting that prices for many goods are already comparable between Bulgaria and cities like Vienna, a trend he described as worrying.

Pekanov also addressed the reasons why Bulgaria’s credit rating has not improved, despite expectations that euro adoption would have a positive effect. He said international investors and credit rating agencies closely track levels of corruption and political stability. In his words, instead of reforming the anti-corruption commission, the authorities effectively dismantled it, which has led to around 350 million euros in frozen funds and has damaged Bulgaria’s credibility abroad.

On the broader debate about a so-called two-speed Europe, Pekanov argued that such a model may not pose a problem for large economies, but represents a serious risk for Bulgaria. He pointed out that countries like Poland, Spain and Greece are recording strong growth because they are carrying out the reforms required by Brussels. By contrast, he said Bulgaria is losing time in internal disputes over responsibility and past decisions, rather than focusing on implementing the necessary reforms and moving forward.