EU proposes disciplinary action against Bulgaria over excessive deficit

SOFIA, June 3 (Reuters) - The European Commission proposed on Wednesday opening a disciplinary action against Bulgaria for running a budget deficit beyond limits set under EU rules.

Speaking before the Commission's announcement, Finance Minister Galab Donev said Bulgaria's budget deficit was likely to hit 7.4% of gross domestic product this year, adding that this would trigger disciplinary steps by the European Union.

Donev said previous governments had successively reported annual deficits of 3% of GDP over the last five years by deferring certain payments.

• Bulgaria joined the euro zone in January and a new government headed by Prime Minister Rumen Radev, the country's former president, took power after winning a landslide victory in a parliamentary election on April 19.

• In its latest report on Bulgaria published in May, the European Commission said the government deficit was set to exceed 4% of GDP in 2026 and 2027.

• Donev said the government would need to take measures, including freezing incomes and cutting state spending, to help bring the deficit within EU limits.

• Countries under this procedure are given deadlines and sets of fiscal measures to bring their finances back into line. If they fail to act, the EU can issue warnings and, for euro zone members, impose financial sanctions such as fines.

(Reporting by Alex Lefkowitz; Writing by Angeliki KoutantouEditing by Gareth Jones)