18.05.2016

Today the European Commission (the Commission) published a proposal for a Council Recommendation on the updated 2016 National Reform Programme and delivering a Council Opinion on the Convergence Programme (2016 - 2019) of the Republic of Bulgaria within the so-called "European Semester". These are to be reviewed and approved by the ECOFIN Council on 17 June 2016 and to be finally adopted by the European Council at its meeting on 28-29 June 2016.

The Commission assesses positively the efforts that Bulgaria has made to address the 2015 recommendations. It has four recommendations for the current year. They cover the areas having macroeconomic imbalances - fiscal policy, banking sector, non-banking financial sector, active labour market policies and insolvency framework. For 2016, in view of the Commission's assessment in the 2016 Country Report for Bulgaria indicating achievement of significant progress, the Commission has removed the part of the 2015 recommendation in the area of the reform of the legislative framework on school education. A new aspect is the inclusion of a recommendation in the area of public procurement in view to strengthening the capacity of the contracting authorities and the Public Procurement Agency, as well as to improve the design and control of public tendering procedures.

In the area of fiscal policy the Commission recommends the government to continue with the consolidation efforts to achieve a cyclically adjusted structural deficit of 0.5% of GDP in 2016 and in 2017 in order to attain the medium-term budgetary objective. It again places a focus on the improvement of tax collection and combating informal economy, including undeclared work.

By the end of 2016 the Commission expects our country to finalise the asset quality review and stress test of the banks, to complete the review of pension funds' assets and the balance-sheet review and stress test of the insurance companies, and to continue to strengthen supervision.

In the area of employment the Commission reinforces the social aspect in the recommendation, integrating social services and active labour market policies. The focus continues to be placed on long-term unemployed, disadvantaged groups and young people not in employment, education or training. It again recommends our country to establish a mechanism for setting the minimum wage as well as to improve the efficiency of the healthcare system. For the first time this year the Commission identifies as a challenge the increase in the coverage and adequacy of the guaranteed minimum income, too.

It reiterates the recommendation in the area of the insolvency framework in view of the limited progress in improving the mechanisms for pre-insolvency and out-of-court restructuring.

The approved update of the 2016 National Reform Programme and the Convergence Programme (2016 - 2019) outline the measures and commitments in response to the identified imbalances and challenges.