Challenges of Bulgaria‘s Fiscal Policy towards Green Transition in the European Union
Challenges of Bulgaria‘s Fiscal Policy towards Green Transition in the European Union

Summary/Abstract: The article is dedicated to the challenges of the fiscal policy of Bulgaria in the context of the European Union’s (EU) priorities for a green, climate neutral economy’s transition. The article analyzes the fiscal aspects of the EU Green Deal and related initiatives NextGenerationEU, Fit for 55 package, RePower Plan, Just Transition Mechanism for the EU program period 2021-2027. It examines the objectives of the EU Green Deal’s implementation in the context of the EU Strategy for Financing the Transition to a Sustainable Economy. It studies the mechanisms, tools and alternative approaches in the application of EU funding and modern financial instruments to stimulate the green transformation of the EU economy.The research assesses the opportunities for the green transition in Bulgaria through the application of national and European financial instruments. The study assesses the effects of the fiscal instruments for mitigating and adaptation to climate change on fiscal deficit of Bulgaria. The study shows that the fiscal policy with EU funding and national co-financing for green policies under the National Recovery and Resilience Plan and the Partnership Agreement for 2021-2027 could augment the green transition and have a net positive impact on the fiscal balance. The study also outlines the possible risks and negative impact on budgetary aggregates.

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