site.btaArmy Modernization Can Be Very Positive for Bulgarian Economy - Deputy PM Donchev

The modernization of the Bulgarian army can have a very positive effect on the Bulgarian economy, commented Deputy Prime Minister and Minister of Innovation and Growth Tomislav Donchev told Bulgarian National Radio.

Currently, European funds - whether from operational programmes or the Recovery and Resilience mechanism - cannot be spent on the armed forces or directly on the military industry. There have been several political announcements that this might change, but it remains unclear whether it will happen in the current programming period or through national recovery plans, Donchev said. According to him, political announcements often lead to political decisions.

"Even if the security environment improves, we are bound to invest in defence over the next decade. I believe the Bulgarian Army should be modernized with the help of Bulgarian industry," Donchev added. "The potential we have must be awakened. The modernization processes of the Bulgarian Army can have a very positive effect on the economy, which could later enhance our export potential," he stated.

Donchev pointed out that history shows that when the world is being reshaped, those who act quickly and wisely can benefit from the changes. "When we talk about semiconductors, chip production capacities, and integrated circuits, the first signs of progress are already visible. Germany is investing in such a facility. We are in an advanced stage of negotiations, and I sincerely hope that if everything goes well, we will have another production facility in this sector in Bulgaria," Donchev said. He noted that Bulgaria already has semiconductor production but hopes to expand it in the coming months. The investment would come from a foreign company, but he did not provide further details.

Regarding the State Budget, Donchev commented that the government's long-term course is aimed at reducing the deficit.

"It is a fact that three or four years ago, Bulgaria abandoned a fiscal policy it had followed for a quarter of a century—one of prudent budgeting and zero deficits. Reversing this course and returning to budget deficits takes time and cannot happen without some budget-funded systems experiencing strain. But we do not want that. It will be a gradual process," Donchev said.

He added that the larger capital expenditure programme reflects the government's ambition to "unlock" European funding.

According to Donchev, using the capital programme as a spending buffer is a very bad practice. "One of the State's main responsibilities, besides ensuring order and security, is to improve the living environment and invest in modernization policies—roads, railways, water and sewage systems, public buildings, kindergartens, and schools. The fact that there was a total withdrawal from investment in these areas has hindered Bulgaria’s development in recent years. This course must be corrected," he stated.

"We are determined to unlock funding from the National Recovery and Resilience Plan, where the delay is severe. However, we must not forget that this plan represents only one-third of European funding. Operational programmes are also extremely important," Donchev concluded.