ESC Issues Recommendations for Fair EU Funding Options for the South-West Region and Pension System Improvements
The Economic and Social Council (ESC) emphasises the urgent need to revise Bulgaria’s regionalisation at the level of classification of territorial units for statistical purposes. This change is essential to foster balanced regional development and ensure equitable access to EU funds for all citizens, businesses, and non-profit organisations.
“The current situation has led to a significant economic imbalance in the South-West region,” the ESC stated in its opinion on “Planning Regions in the Republic of Bulgaria at NUTS 2 Level,” adopted during its plenary session.
The disproportionately high wealth of Sofia-City, relative to the national average, artificially inflates the perceived wealth of the entire South-West region. This distortion also reduces the intensity of grant funding available to the region. As a result, districts within the South-West region, excluding Sofia-City, experience significant economic lag. They rank last in GDP per capita, measured by purchasing power standards, even falling behind the traditionally underdeveloped North-West region.
The aggregated statistics for the districts of Pernik, Kyustendil, Sofia Region, and Blagoevgrad, combined with Sofia City under the current regionalization, create a distortion that deprives enterprises and their workers in these areas of funding. Enterprises in municipalities with similar indicators located in other planning regions have received such funding, the ESC noted in its opinion. The Council further emphasized that “any other region combined with Sofia City would face a similar disadvantage”.
The designation of the South-West region as a ‘transition region’ has led to a reduction in funds allocated to shared management programs, as well as a decrease in the percentage of regional aid for enterprises in the districts of Pernik, Kyustendil, Blagoevgrad, Sofia, and Sofia-City. Due to the high GDP per capita in Sofia-City, districts such as Kyustendil and Pernik, which have significantly lower GDP values, are placed at a serious disadvantage compared to other districts in the country with similarly low GDP per capita, such as Haskovo, Sliven, and Silistra. These districts, classified as ‘less developed regions’ rather than ‘transition regions,’ are more favored and receive greater EU funding.
The ESC emphasizes that the formation of statistical regions should be accompanied by a package of legislative measures defining the role of planning regions in the next programming period. This approach aims to foster regional development and ensure equitable access to EU funds for all citizens, businesses, and non-profit organisations. European funds hold significant potential to improve economic and social conditions. Grants with the highest possible intensity can encourage enterprises to undergo rapid transformation, enabling them to produce and deliver competitive products and services while enhancing energy efficiency and innovation. Such investments will contribute to GDP growth, reduce accumulated corporate debts, and create more opportunities for income growth.
The ESC insists on the urgency of establishing a consensus national position on the matter by March 2025, in anticipation of the Commission’s upcoming proposals for the Multiannual Financial Framework (2028–2034), expected next year. Milena Angelova (Group I), Alexander Zagorov (Group II), and Lalko Dulevski (Group III) have been appointed as rapporteurs. Their efforts are supported by external experts Ivelina Evgenieva, Mario Ninov, and Prof. Kamen Petrov.
The conclusions and recommendations were presented to a distinguished audience, including Deputy Minister of Regional Development and Public Works Yura Yordanova-Vitanova, representatives from the Bulgarian Directorates of the European Commission, and the National Statistical Institute.
During the Plenary Session, the ESC adopted an Analysis of the Current Pension System and Proposals for Its Improvement, developed at the suggestion of the President of the 49th National Assembly. Ivelin Zhelyazkov from Group I, Assiya Goneva from Group II, and Ofelia Kaneva from Group III were appointed as rapporteurs on the act.
The document was developed over nearly a year in extreme detail and represents a rare balanced view of pension reform by employers, trade unions, and civil society organizations, as noted during the discussion. The analysis confirms the correctness of the country’s current three-pillar pension model, while making recommendations for changes to each of the three pillars to improve the pension system.
The texts were discussed and adopted in the presence of the Deputy Minister of Labour and Social Policy Lazar Lazarov, representatives of the National Social Insurance Institute, the National Revenue Agency and the Financial Supervision Commission.
