EU Demands Repayment as Bulgaria Struggles with Reforms and RRP Deadlines

Bulgaria risks returning 143 million euros previously allocated under the Recovery and Resilience Plan (RRP) after the National Assembly voted to dissolve the Anti-Corruption Commission, OFFNews reported. Sources from the European Commission confirmed that the closure has triggered a demand for repayment, following consultations with members of the Bulgarian government and parliament. Experts in Brussels also noted that seven draft laws, technically ready for adoption, are essential for the country to secure the next tranche of funding under the RRP.

The Bulgarian RRP, supported by a total of 6.17 billion euros in grants, has so far delivered three payments totaling 3.27 billion euros. The first tranche, disbursed in December 2022, amounted to 1.37 billion euros. The second, delayed significantly, was eventually released on 11 November 2025 for 438.6 million euros, following Bulgaria’s request to revise its plan in April 2025. After withdrawing its earlier payment request to allow for revisions, Bulgaria resubmitted the second payment claim on 23 July 2025 for 653 million euros. This included 59 milestones spanning 28 reforms and 12 investments, covering areas such as education, judicial and public procurement reforms, electricity market liberalization, energy storage development, and tackling energy poverty. The European Commission partially approved this request on 3 October 2025. The remaining 1.47 billion euros of the second payment was released at the end of 2025 after verifying the fulfillment of 48 out of 50 milestones and targets.

The third payment, Bulgaria’s largest, covers 22 reforms and 19 investments. The main priorities include advancing scientific research, decarbonization initiatives, public procurement modernization, reforms in state-owned enterprise governance, and the development of e-government and e-health services.

To secure the fourth payment, Bulgaria must pass amendments to four existing laws: the Civil Servant Act, introducing an integrity test; corporate income tax legislation to encourage electric vehicle adoption; the Public Procurement Act, requiring advance tender announcements; and the Renewable Energy Sources Act, aimed at facilitating grid connectivity and electric mobility. Additionally, three new laws must be adopted: the first comprehensive lobbying law, a public transport framework, and legislation on water supply and sanitation. While these laws have been coordinated with Brussels and some are under public consultation, parliamentary delays pose a risk. Early elections and the uncertainty of forming a new government may impede progress, although constitutional changes allow the parliament to convene extraordinary sessions to pass urgent legislation even after dissolution.

Radan Kanev, MEP from the European People’s Party/Democratic Bulgaria, warned in September 2025 that the government’s intent to retain RRP funds without implementing reforms threatens the plan’s effectiveness. Former Deputy Prime Minister Atanas Pekanov also highlighted the risk of losing significant funds due to delays, citing energy sector reforms and the liberalization of electricity markets as key bottlenecks. He stressed that of the 84 measures pending under the fourth and fifth payments, only one has been implemented, putting approximately 2.5 billion euros at risk if reforms remain incomplete by the end of summer 2026.

The European Commission stressed that the implementation of the Anti-Corruption Act follows strict EU regulations, allowing no deviation from deadlines. Bulgaria has already lost 215 million euros over anti-corruption reforms, and the closure of the Anti-Corruption Commission will trigger the recovery of an additional 143 million euros. Combined, the total loss could exceed 400 million euros. Other delayed reforms, particularly oversight of the Prosecutor General, put another 109 million euros at risk. The dismissal of Judge Daniela Taleva, previously appointed as ad hoc investigator of the Prosecutor General, and the succession of Anton Urumov have left milestones incomplete, forcing the European Commission to propose temporary postponement of part of the payments while other objectives continue to be funded.

Additional concerns include the arrest of Varna Mayor Blagomir Kotsev and ongoing restructuring of the Bulgarian Energy Holding, both requiring timely legislative resolution. Despite these challenges, investment projects under the Public Investment Plan have progressed well, with two payments already disbursed and funds safely held in the National Fund.

According to European Commission data, Bulgaria’s absorption rate under the Recovery and Resilience Mechanism stands at 53%, placing it in the mid-tier among EU member states. While France and Denmark have nearly completed their plans, and Hungary remains largely un-funded due to systemic corruption issues, Bulgaria’s remaining approximately 2.5 billion euros hinge entirely on parliamentary decisions.

Institutional transparency remains uneven. OFFNews inquired to multiple ministries revealed limited or no response from the Ministry of Energy, while the Ministry of Finance confirmed that most RRP funds were concentrated among a small number of state-owned enterprises. Metropolitan EAD received over 207.6 million leva, and the Electricity System Operator (ESO) 85.6 million leva, together accounting for over 96% of state-owned enterprise disbursements. Private sector distribution was more fragmented, with the top beneficiaries receiving between 4 and 11 million leva each.

Reforms in the justice system have progressed modestly. Between April and July 2025, amendments to the Administrative Procedure Code enabled electronic administrative proceedings, improving citizen access to justice. The Inspectorate of the Supreme Judicial Council was strengthened, and the Law on the Protection of Persons Reporting Violations entered into force, aligning with EU whistleblower protections. Early steps toward regulating lobbying and introducing anti-corruption measures in state-owned enterprises have also been taken, though enforcement is pending. Changes to commercial and bankruptcy law, including the Law on Bankruptcy of Individuals, remain under evaluation for reporting to the European Commission.

The Ministry of Electronic Governance oversees implementation of digital infrastructure and archive digitization projects through the Executive Agency for Electronic Governance Infrastructure. Contracts have been awarded to multiple firms for network upgrades, ultra-high-speed nodes, and a secure backup internet node. Archive digitization is managed exclusively by A1 Bulgaria EAD. Meanwhile, the Ministry of Regional Development and Public Works confirmed ongoing investments in sustainable energy renovations, green mobility, digital construction transformation, and the introduction of building information modeling.

Bulgaria must meet all RRP milestones by 31 August 2026 to qualify for payments under the Recovery and Resilience Facility, with the Commission obligated to complete disbursements by 31 December 2026. The timing and pace of legislative and reform actions will be critical in ensuring that Bulgaria retains the remaining funds, with delays potentially costing hundreds of millions of euros.