MoD and MoI exempt from 10% cut: why the salary measure is rendered almost meaningless

The exclusion of the security structures from the requirement for 10% savings in wage costs as of 1 September in practice significantly undermines this budget measure. Personnel expenses in the "Ministry of Interior" and the "Ministry of Defence" alone, without the other security institutions, account for 49% of all expenditures under the "personnel" item in the state budget. This means that the potential savings from reducing wages will be limited.

This is shown by the review of the planned remuneration expenditures in the 2025 budget and the expected effect of the optimizations ordered by Finance Minister "Gълъб Донев" in the draft budget for 2026. The intention for a 10% cut in wage costs after 1 September turns out to be difficult to apply, given that almost half of all salaries in the budget fall within systems exempted from the measure.

Who is excluded from the 10% cut

According to the budget guidelines of the Ministry of Finance, all primary budget spending units must draw up their draft budgets in such a way that, from 1 September, a 10% reduction in expenditures for wages and social security contributions is achieved. In the same guidelines, however, it is explicitly stated that this requirement does not apply to the uniformed staff of the "Ministry of Interior", "Ministry of Defence", "DANS", "NSO", the intelligence services and the prison system.

It is precisely these exclusions that shrink the expected effect. For the "Ministry of Interior" and the "Ministry of Defence" alone, the 2025 budget envisages 6.285 billion leva in personnel costs out of a total of 12.737 billion leva for wages in the entire state budget. If, in the last four months of the year, these two ministries were also subjected to a 10% reduction, this would bring approximate savings of 127.3 million leva for the "Ministry of Interior" (around 65 million euro) and 82.2 million leva for the "Ministry of Defence" (around 42 million euro).

The fastest-growing wages – outside the cuts

For the moment there is no public explanation why exactly the security systems have been taken out of the general requirement for savings, given that it is precisely there that personnel costs have been growing the fastest in recent years. In 2025 wages in the "Ministry of Interior" increased by about 50%, in "DATO" – by a record 75%, and in "DANS" – by 66%.

The sharp rise in labour costs in these structures is the result of linking basic salaries to the country’s average wage. Nevertheless, the Ministry of Finance proposes that the security departments be excluded from the general 10% wage‑cost reduction measure as of 1 September. In practice this probably also means partial exclusion from staff reductions and other optimisation steps.

Vacant positions but no real optimisation

The paradox is that the security structures are also among the systems with the largest number of vacant positions. The staff establishment of the "Ministry of Interior" is 51,565 positions – 43,741 on service relationships and 7,824 on labour contracts. Currently, there are 4,570 vacancies – 4,343 on service and 227 on labour contracts. Of these, 1,720 positions have been permanently vacant for more than six months.

In practice, the "Ministry of Interior" accounts for the bulk of all vacant posts in the administration. According to the latest report on the state administration, the total number of unoccupied positions – in central, territorial and municipal administrations – is 12,348, of which 5,729 have remained vacant for more than six months. This raises questions about how seriously numerical optimisation is being pursued when the largest systems with unfilled positions are excluded from the measure.

How will the 10% lower total expenditure requirement be met

An additional problem is that, alongside the 10% reduction in personnel costs from 1 September, all budget spending units – including the "Ministry of Interior" and the "Ministry of Defence" – face another condition: to plan total expenditures 10% lower than the 2025 levels. If there is no cut in personnel costs for the security ministries, fulfilling this second constraint becomes practically impossible without drastic reductions in other budget lines.

The guidelines explicitly state that all ministries must prepare draft budgets with no new wage increases, regardless of the dynamics of the average national salary. As experts have noted, it is unclear to what extent such a measure can be legally justified in the middle of the budget cycle, and serious disputes are expected on this issue.

A budget measure with limited effect

The conclusion from the figures is that without the participation of the "Ministry of Interior", the "Ministry of Defence" and the other security departments in the 10% wage‑cost reductions, the budgetary impact of the measure will be far smaller than initially expected. The systems with the fastest‑growing pay and the highest share in total personnel costs remain protected, while the rest of the administration will have to seek savings within already tight budgets.

Thus the Ministry of Finance faces a difficult task: to demonstrate fiscal discipline and 10% expenditure cuts without affecting the sectors with the greatest weight and the fastest rising wages. And for systems such as the "Ministry of Interior" and the "Ministry of Defence" an even more difficult question looms – how to justify to the public the high personnel costs when the effect of real structural reforms remains limited.