Balgarianovinite.com The inclusion of social policies in the so-called 2025–2026 Extension Budget Bill, such as the indexation of incomes of employees in the public sector by the annual inflation rate, undermines the principles of budgetary legislation and creates a dangerous precedent in the country’s budgetary policy, the Fiscal Council said Friday in a comment on the 2026 Revenue Collection and Expenditures Bill.
According to the institution, by its legal and economic nature an extension budget should be a temporary measure with a limited scope, ensuring solely the continuity of state payments until the adoption of a regular budget law.
Unlike previous extension budgets, which strictly followed the structure of the preceding year, the current law goes beyond these limits. Through it, substantial changes are introduced on the expenditure side that are not aligned with long-term fiscal sustainability and circumvent the normal debate on budgetary policy, the Fiscal Council said.
The use of an extension mechanism to introduce new social policies compromises the principles of the Public Finance Act and turns a temporary instrument into an alternative to a regular budget, the comment reads.
Regarding the increase in the minimum wage for 2026 and the indexation of incomes to inflation, the institution noted that staff expenditure for 2025 had already been indexed, with growth reaching around 20%, which in practice leads to overcompensation relative to actual price dynamics. According to the Fiscal Council, using end-of-period inflation (a point-in-time value) is incorrect, and the proper approach requires using average annual inflation, measured by the Harmonised Index of Consumer Prices in the context of euro area membership, rather than the national consumer price index.
In addition, the institution believes it would be appropriate to use forecast inflation for 2026, rather than the inflation that will be recorded at the end of 2025.
A 10% wage increase in the public sector generates an additional structural expenditure of EUR 840 million. If a more moderate indexation (around 5%) is applied, the additional pressure on the budget amounts to EUR 420 million per year, or an average of EUR 35 million per month, the material said.
The Fiscal Council also pointed out that there is a serious risk of overestimating revenues for 2026, with a deviation ranging between EUR 3.5 billion and EUR 4.7 billion.
The 2026 Revenue Collection and Expenditures Bill fulfils its short-term function of ensuring the State’s financial continuity. At the same time, it creates structural tension within the fiscal framework by introducing permanent expenditures through an instrument of a temporary nature, the material said.
The inclusion of social policies (such as indexations) in the extension mechanism compromises the principles of budgetary legislation. Under the Public Finance Act, its role is that of a temporary measure to ensure the continuity of state payments, not an alternative to budgetary policy. A precedent is being set whereby economic imbalances are compensated through the budget, although they should be addressed through structural reforms, the Fiscal Council added.
Earlier this week, the National Assembly adopted the so-called extension budget at second reading. Between the first and second readings of the bill, MPs approved a proposal by Continue the Change – Democartic Bulgaria MP Assen Vassilev for a one-off indexation of wages equal to the accumulated annual inflation as of December 31, 2025, for all public-sector employees who are not on the minimum wage.
Income Indexation through Extension Budget Undermines Budgetary Legislation Principles, Fiscal Council Says 2025 THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2025-12-19 17:31:57 Latest news World news Country news Most important news latest news most important latest of the day Justice Petar Nizamov Feathers Petar Nizamov- Feathers Justice bg iustitia.bg iustitia iusticia usticia investigation Burgas Bulgaria news news of the last hour news of the day news of today Bulgaria news The news from Bulgaria blitz news top news most important most commented latest news Boyko Borisov news weather coronavirus news news weather facebook youtube facebook instagram news today news of the last minutes news today today news news bg news leading news hot news bg news site for news all news news bg news of the last hour latest latest news bg news of today news today news today news of the last hour latest news today news bg news news 24 hours news vesti bg novini news world bird bg bivol bg bivol trud bg novini latest news today novinite bg news hello bulgaria political party coat of arms delyan peevski scandalous Bulgarian National Television Free Europe Television scandal exclusive live tv live right now tv tv online tv program bg live now tv news online tv online live court Burgas court Burgas district court Burgas court Burgas district court Burgas district court Burgas appellate court Burgas prosecutor Burgas prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Prosecutor General Ivan Geshev Prosecutor Geshev Tsatsarov Ministry of Internal Affairs Burgas ODMR Burgas ODPR Burgas police Burgas district police Burgas prosecutor Tsatsarov SGS cases Varna court chairman of the SGS court decisions on civil cases decisions on cases Plovdiv court decision of the court decisions cases Varna court criminal cases district district court decisions work in the court SGS chairman of the SGS judges Sofia court post judges Plovdiv court Plovdiv judges Plovdiv Supreme Court Inspectorate Supreme Court Supreme Judicial Council lawyer lawyer criminal cases lawyer civil cases lawyer marriage cases lawyer administrative criminal law criminal process civil law civil process administrative law constitutional law
