22.02.2017

The European Commission published the Country Reports 2017 on Member States' progress in the implementation of the 2016 country-specific recommendations of the EU Council, including in-depth reviews on the prevention and correction of macroeconomic imbalances. From the in-depth reviews of 13 countries, the conclusion of the Commission is that Finland should exit the Macroeconomic Imbalances Procedure.

According to the assessment of the Commission, Bulgaria, together with five other Member States, is still experiencing excessive imbalances. This is mainly due to high corporate indebtedness and incomplete labour market adjustment. Deleveraging in the corporate sector has been slow, leaving a large private sector debt stock and high non-performing loans levels. Labour market conditions have improved, but employment levels are low, long-term unemployment is still high, and labour market mismatches persist. Challenge is also the provision of quality education for disadvantaged groups. According to the Commission, the Bulgarian authorities have taken the necessary actions to carry out the asset quality review and stress tests for the banking sector, the balance sheet reviews of insurance and re-insurance companies and the asset reviews of pension funds.

The Commission notes the successful fiscal consolidation in the context of favourable macroeconomic environment.