EU Commerce Commissioner Valdis Dombrovskis issued a note of caution to Bulgaria on Thursday during a meeting with journalists in Sofia. Asked by Club Z what lessons the country should take from others that joined the euro area before it, Dombrovskis pointed directly to Greece’s experience as a cautionary tale.

“In a sense, I would mention a warning,” he said, “that as part of the eurozone, Member States should pursue a responsible fiscal and macroeconomic policy.” While he noted that there have been no recent examples of eurozone countries falling into trouble, he pointed to Greece as a case where expectations were too optimistic and fiscal discipline was lacking. “This is probably the only thing I would note in this regard,” he added.

Increased Budget Deficit for Defense Spending Approved

Dombrovskis also confirmed that Bulgaria is among the EU countries granted the right to increase their budget deficits by up to 1.5% of GDP over the next four years. The allowance, made due to heightened security concerns over Russia’s aggression, will support defense investments.

“We have approved national clauses for an exception for a number of Member States, including for Bulgaria,” he explained. The goal, he said, is to help countries replenish depleted military stocks, given that much of their equipment and ammunition has been sent to Ukraine.

Financial support for Ukraine remains a top priority for the European Commission. According to Dombrovskis, EU assistance this year alone is expected to amount to approximately €30 billion.

Frozen Russian Assets and the EU’s Role

When asked whether the EU would be able to make use of frozen Russian assets to support Ukraine, Dombrovskis replied briefly: “We look at all options and appreciate them.” He added that revenue generated from those frozen assets is already being used to repay loans provided by G7 nations to Ukraine. “So in a sense, Russia is already paying for the damage it causes in Ukraine,” he noted.

Responding to a question about the weakening of US military assistance to Kyiv, Dombrovskis admitted it would likely create gaps. “Obviously smaller military support from the United States will lead to some gaps and we will have to see how we will fill them.” He mentioned that formats like the Ramstein group continue to generate commitments, citing the United Kingdom as a recent example.

The EU is also moving ahead with integrating Ukraine’s defense industry into its broader military planning. “Work on cooperation is very intense,” he said, referring to the bloc’s “European Defence Readiness 2030” strategy.

Eighteenth Sanctions Package on Russia in the Works

The Commissioner revealed that the EU is finalizing an 18th package of sanctions against Russia. Among the planned measures are lowering the oil price cap from to per barrel, imposing restrictions on Russia’s so-called “shadow fleet” of oil tankers, and targeting the country’s financial sector more aggressively. “It is very important to continue to impose these sanctions, to put pressure on Russia and to reduce its ability to finance its military machine,” Dombrovskis stated.

EU Braces for Tariff Disputes with US, Eyes Closer Ties with Asia

When asked whether the European Commission’s moves toward pragmatic engagement with China and India were intended as leverage in trade talks with the United States, Dombrovskis didn’t give a direct answer. Instead, he emphasized the scale of EU-China trade and reiterated concerns over market imbalance. “We know that our trade relations are very unbalanced, mainly due to the fact that the EU market is more open to Chinese goods and companies than the Chinese market is for European goods and companies,” he said.

He confirmed that negotiations with India on a free trade agreement are ongoing. “India’s economic and geopolitical role will continue to grow,” Dombrovskis noted. “It is important to engage.”

On the matter of US tariffs, he warned that they generate uncertainty and hamper global growth. “We recently published our spring economic forecast and for the period 2025–2026 we lowered our economic growth forecast by 0.7%. One of the main reasons is precisely the negative economic impact of tariffs.”

Dombrovskis said the EU is still hoping to reach a negotiated solution with the US. “But if this does not happen, we are ready to introduce counter-tariffs to protect our companies and our economic interests.”

He underlined that the EU is working hard to diversify partnerships. Recent or modernized trade agreements have been signed with countries like Mexico, Switzerland, and the UK, while talks are advancing with India, Indonesia, Thailand, the Philippines, and the UAE. “We are working to the maximum extent to maintain the rules-based international trading order, because ultimately we believe that is what is best for everyone.”

Source: Club Z