Budget 2026: Government approves the project without social dialogue

The government is preparing to approve the draft bills related to the 2026 Budget, in the form agreed upon with the coalition partners, but without prior consultation in the National Council for Tripartite Cooperation. This decision comes after employers' organizations again refused to participate in a discussion of the budget within the framework of the NCTS.

Yesterday, the government press service announced the cancellation of the extraordinary meeting planned for the social partners on budget issues. This is another step in the complex situation surrounding the preparation of the financial framework for next year. Previously, on November 5, employers also did not appear at the meeting of the tripartite, at which the three key draft budgets were to be discussed - the state budget, the budget of the NHIF and that of the Public Social Security.

In a statement, the government emphasized that it has always been guided by the principle of the need for social dialogue when making important decisions. "Good management tone required us to consult with all social partners," the message states. "But the repeated refusal of some of them to participate in the meeting of the NCTS gives a clear assessment of their attitude towards the budget."

Tension in relations between the ruling parties and social partners is evident. After a meeting held on November 11, between the chairman of the parliamentary group of GERB-SDS and the presidents of KNSB and "Support", it became clear that there is no consensus between employers and trade unions regarding the budget measures.

The Association of Organizations of Bulgarian Employers (AOAB) expressed its position categorically. According to AOAB, the presented draft state budget for 2026 contradicts the declared policy of the ruling parties to maintain the existing tax and social security model. Instead, significant changes are envisaged, including an increase in social security contributions by 2 percentage points, which will lead to an increase in social security costs for the "Pensions" fund. In addition, a twofold increase in the tax on dividends is envisaged. AOAB warns that these measures will take additional funds from those working in the real sector to finance ineffective expenses in the budgetary sphere, including a planned increase in salaries in the "Security and Defense" and "Higher Education" sectors. According to employers, this transfers the burden of political populism to businesses and employees, which will lead to discouragement of investments, slowing economic growth, expansion of the gray economy and, ultimately, a reduction in budget revenues. For these reasons, AOAB does not support the draft budget.

In its position, AOAB points out that the budgetary procedure does not provide for a real debate and the search for optimal solutions. According to employers, offering the same document for discussion, without corrections, after a previous attempt at formal consultation, is an imitation of consultations, devoid of real debate and responsibility.

"We will not legitimize such a decision," the AOAB statement says. "Our responsibility is to protect the competitiveness of the Bulgarian economy, and not to participate in a process that ignores reforms and continues ineffective spending, including borrowed financial resources." AOAB declares its readiness for real dialogue under appropriate conditions.

For his part, the President of KNSB Plamen Dimitrov expressed the opinion that the draft budget for 2026 is acceptable. He noted that the budget gently burdens businesses and people in order to be able to finance the necessary expenses, which have been largely agreed upon in Parliament.

Yesterday, Boyko Borisov announced that the government will submit the 2026 budget to parliament. He also commented on the way the minimum wage is formed, which is tied to the average, explaining that he has made a commitment to employers in the next budget to change this.

At the same time, yesterday, the parliamentary budget and finance committee failed to gather a quorum for an extraordinary meeting, initiated by "We Continue the Change", at which employers' organizations and trade unions were to be heard on the draft budget for 2026.

On November 3, the Ministry of Finance published on its official website the draft Law on the State Budget for 2026 and the Updated Medium-Term Budget Forecast for the period 2026-2028. It is important to note that this budget is the first in euros.

The submission of the budget draft to the National Assembly is forthcoming, after the government decided to approve the draft without prior consultation with the social partners, relying on the support of the ruling parties. With the approach of the key vote in parliament, the political situation remains tense, and public attention is focused on the final decision on state finances for next year.