At the end of 2025, Bulgaria is experiencing one of the biggest political crises in recent years. Tens of thousands of people took to the streets of Sofia and other cities to protest against the draft state budget for 2026, which was drawn up in euros for the first time ahead of the country’s official entry into the eurozone in January 2026. The protests quickly escalated from a discussion about the budget into a broad front of discontent: “against” tax burdens and rising costs, “for” transparency and punishment for corruption. The protests were accompanied by clashes with the police, and under public pressure, the government withdrew the draft budget and announced that it would be revised.
The socio-economic background against which the conflict erupted did not develop overnight. According to data from the IMF and the European Commission, Bulgaria demonstrated steady economic growth in 2024-2025. Domestic consumption and the labor market remain stable, with GDP growth in 2025 estimated at around 3%–3.5%. However, at the same time, there has been an increase in inflation, accelerated growth in wages and credit activity, as well as pressure on public finances. Thus, the European Commission’s forecasts show the debt burden increasing from around 24% of GDP in 2024 to more than 30% in 2026-2027 due to refinancing and capital investments in strategic companies. These macroeconomic realities made any fiscal adjustment, especially during the transition to the euro, noticeable and painful.
The 2026 budget proposal itself became a catalyst for protests, as the government planned for a significant increase in spending. According to some estimates, total government spending was approaching 45-46% of GDP. Measures to mobilize revenue were also proposed, including a significant increase in social contributions and a doubling of the dividend tax. For households and small and medium-sized businesses, such steps appeared to be a burden on income and investment plans, especially in the run-up to the transition to the euro, which some of the population associates with the risk of price increases. International institutions also expressed concern about the fiscal sustainability risks of the draft. Under pressure from external and internal signals, the cabinet agreed to withdraw and revise the document.
However, the budget is only the visible cause. The deeper context of the crisis lies in years of institutional mistrust and long-standing accusations of corruption against the authorities. Bulgaria consistently ranks low in international transparency indices, and state institutions are often accused of being susceptible to political influence. One striking example of this problem is Deyan Peevski, a media mogul and influential politician who was added to the US sanctions list in 2021 for corruption and abuse of power. Despite formally divesting himself of some of his business assets, his influence, according to journalistic investigations, has remained and even grown through political connections and control over the media.
In 2025, protests against Peevski’s involvement in public politics once again brought together thousands of people, who pointed to his role in monopolizing the media market and influencing the judiciary. The conflict surrounding attempts to pressure the banking system into refusing to serve entities linked to sanctioned figures exposed the vulnerability of financial and regulatory institutions. The central bank publicly acknowledged that it did not have sufficient legal mechanisms to protect against this kind of influence.
Against this backdrop, any economic measures, especially those affecting taxes, social contributions, and major government spending, are perceived by society not simply as policy, but as a potential redistribution of resources in favor of “their own.” This is precisely why the dispute over the 2026 budget instantly turned into a political explosion, as for many Bulgarians, dissatisfaction with the budget figures became merely a pretext for a more systematic demand: limiting oligarchic influence, reforming the prosecutor’s office, and truly restoring the independence of state institutions.
It is difficult to categorize the protesters as belonging to a single social group, as opposition parties, trade unions, entrepreneurs, and civil activists all participated in the rallies. It is symbolic that alongside demands for a budget review, there were slogans calling for transparency in government and zero tolerance for corruption – a sign that people are tired of a “system” where decisions are made outside of public scrutiny. On the streets, this resulted in attempts to surround the parliament, block the work of deputies, and, in several cases, clashes with the police.
What will happen next? There are three possible scenarios. The first is a short-term compromise, whereby the government revises the budget, scales back certain tax initiatives, and promises to consult with trade unions and businesses. The protests will subside, public opposition will weaken, and the political system will gain time. This is the most likely outcome in the coming weeks, but it does not solve the systemic problem, because without institutional reforms, mistrust will remain and new reasons for protest will emerge.
The second scenario could be the possibility of escalation. If the budget is formally revised and allegations of corruption are further substantiated, protests may continue and intensify, creating political instability, pressure on parliament, and even the threat of early elections. For the economy, this would mean increased uncertainty, a possible slowdown in investment, and complications in relations with the EU over payments and recovery programs.
The third and most desirable, but least likely, scenario appears to be systemic transformation. Under pressure from the EU, the IMF, and powerful civil society demands, the authorities will begin real institutional reforms to strengthen the independence of anti-corruption bodies, reform the prosecutor’s office, and increase transparency in transactions involving state assets. This path will restore trust and open up prospects for sustainable economic growth, but it requires political will and a willingness on the part of powerful players in the political elite to make radical changes.
Bulgaria enters 2026 facing a dilemma: on the one hand, there is the attractive prospect of European integration and economic growth; on the other, there is a chronic lack of trust and political vulnerability. The budget was the spark, but the fuel for the fire lies in the history of relations between the government, business, and society. Whether the alliance of “citizens + European institutions + political will” succeeds in turning protest into reform will determine whether the current crisis becomes a turning point or another cycle of incomplete transformation.