Executive Summary

Decline in governance quality
Bulgaria saw a drift downward in terms of the quality of its governance structure in 2019. The junior partner in the ruling coalition, a grouping of three xenophobic nationalistic parties, has for all practical purposes fallen apart. The effort to stay in power itself is largely what has held the ruling coalition under Prime Minister Boyko Borissov together. Media freedom continues to deteriorate; major gaps in the anti-corruption framework and its effectiveness have been uncovered; a personal-data leak affecting more than half of Bulgaria’s citizens was allowed by a government agency, with no effective investigation or consequences following; and party financing has been changed in a way that clearly allows for widespread development of illicit dependencies. Public protests erupted over a seemingly technical issue, the appointment of a new prosecutor general.
Economic performance relatively good; challenges in education, labor market
This drift took place against the background of continued relatively good economic performance, featuring moderately high growth rates, a small budget surplus and decreasing public debt, a record-high employment rate and low unemployment rates. The external trade balance has slightly improved, but in a context of decreases in both exports and imports. Structurally, Bulgaria still faces serious challenges in terms of the population’s skill levels and the economy’s innovation capacity and productivity. The country continues to lag severely with regard to public and private research and innovation funding. Other serious problems include the relatively low-skilled labor force, and the economic exclusion of people with low educational attainment and some minority groups. Three main challenges in this area remain: achieving reform of the education sector to produce a more adequate skills base; addressing negative demographic trends, which – given the existing healthcare and pension systems – continue to squeeze the labor market and threaten the financial sustainability of these systems; and the need to further increase labor market flexibility.
Ineffective anti-
corruption agency
The new centralized anti-corruption agency, established in 2018, not only proved ineffective in stopping or prosecuting a high-profile case involving suspicious real-estate acquisitions by people in the high echelons of power, but was itself involved in a corruption scandal when its director was revealed to have made unregulated additions to his apartment. The persistent drop in the quality of media freedom in Bulgaria over the last decade continued in 2019, with the national radio service in one case being pulled off the air for several hours with the explicit goal of preventing a particular journalist from being able to cover the prosecutor general appointment procedure.
Limited strategic capacity in executive
The executive’s institutional capacity to coordinate and plan strategically is limited. While EU membership has increased strategic planning, interministerial coordination is weak and there is no mechanism for regularly monitoring institutional arrangements. The second and third Borissov governments paid little attention to addressing these issues. Even though both governments were coalitions, which could have included in their coalition agreements precise details regarding policy coordination and responsibilities, Borissov and his key coalition partners chose to proceed in an informal manner without explicit agreements. Despite the lack of a clear coalition agreement, the United Patriots, while part of the government, have behaved more moderately than initially expected.
Slight improvements in
RIA framework
After being enhanced in 2016, the RIA framework has improved somewhat, especially with respect to policies and regulations proposed at the national executive level, but less so with respect to legislation proposed by individual members of parliament or at the local level. The existence and operation of the independent Fiscal Council and the RIA framework promise better-informed legislation.
Reactive behavior on international level
Internationally, Bulgaria continues to behave reactively on issues ranging from international financial stability to climate change, international democratic assistance and migration. Even though migration is an important issue in domestic politics, the country remains incapable of formulating a concise and well-defined position. While it never obstructs measures aimed at developing the framework for international cooperation, it is also never among the main proponents of international cooperation. When Bulgaria held the presidency of the Council of the European Union during the first half of 2018, it promoted the integration of the Western Balkans into the European Union.
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