Bulgaria’s government will propose a revised 2026 draft budget on December 8 after reaching a compromise with trade unions and employer groups on key fiscal measures, Finance Minister Temenuzhka Petkova said on December 5.

The move follows mass protests that forced the ruling GERB party to withdraw its initial draft budget on December 2 amid public anger over planned increases in pension and social-security contributions and higher pay for state employees.

The protests on December 1 drew tens of thousands of people across Sofia, Varna, Plovdiv and Burgas in the largest demonstrations the country has seen in years, with protesters demanding the withdrawal of the budget, the government’s resignation and the removal of controversial figures including Delyan Peevski.

Petkova said the National Council for Tripartite Cooperation would meet on the morning of December 8, after which the cabinet is expected to approve the revised bill and submit it to parliament the same afternoon. She said consensus had been reached on several contentious issues.

Under the agreement, the dividend tax will remain at 5%, and the proposed two-percentage-point increase in pension insurance contributions will be scrapped. The government will also drop a requirement for businesses to use National Revenue Agency-approved sales management software, and will abolish an automatic mechanism linking pay levels in sectors such as defence and security to the national average wage.

Trade unions and employers agreed that the maximum contributory income for 2026 will be set at €2,300. As part of its wider income policy, the government plans a 10% pay rise for all public-sector employees. Petkova added that spending cuts would be made to offset revenue losses, including a reduction of €450mn in national co-financing and €300mn in EU-funded capital programmes.

The compromise effectively removes planned revenue gains from higher social-security contributions, dividend taxation and tighter fiscal controls, forcing an overall €750mn cut to the capital programme, Petkova said. She noted that broader structural reforms had been postponed until 2026.

Meanwhile, Bulgaria’s opposition said it would file a sixth no-confidence motion against Prime Minister Rosen Zhelyazkov’s cabinet on December 5. The government, in office since January 2025, has survived five previous attempts to unseat it, underscoring the political instability and low public trust that have dogged policymaking.

Bulgaria is due to adopt the euro in January 2026, making this the country’s first budget to be drafted in the single currency. The government’s failure to push the original bill through parliament at such a sensitive moment in the transition has heightened concerns over policy continuity and the country’s readiness for eurozone entry.