Bulgaria’s government said on Tuesday that it is withdrawing a disputed budget proposal after a large evening protest brought tens of thousands of peaceful demonstrators, which later turned violent when a much smaller group of masked men clashed with the police.

Opposition groups and business organisations have warned that plans to raise taxes, increase social security contributions and expand spending could harm investment and push more people into the shadow economy as the country prepares to join the eurozone at the start of next year.

The centre-right government led by Prime Minister Rosen Zhelyazkov first agreed to take back the draft for a full revision after protests last week, but later stepped back from that decision, which triggered fresh protests in Sofia and other major cities on Monday night. Organisers said that 50,000 people gathered in Sofia.

Protesters, many of them young Bulgarians, called on the government to revise the budget draft or step down.

“We will not allow ourselves to be lied to, we will not allow ourselves to be robbed,” people chanted at the protest in Sofia.

Some held banners with messages like “Young Bulgaria without the Mafia.”

Bulgarian President Rumen Radev, who is against the government and comes from the political left, backed the protesters in a televised address to the country on Tuesday evening and said changes were needed that “will lead to the rule of law and the restoration of statehood.”

“The government is disgraced. Resignation is urgent. Early elections are the only way forward,” Radev said.

He urged Bulgarians “not to miss the opportunity to change Bulgaria,” and also asked for “unity, will and wisdom to preserve peace from provocations.”

Earlier in the day, Prime Minister Zhelyazkov mentioned several changes that will be made, including a review of the investment programme, and he did not rule out the option of entering 2026 with an extended version of this year’s budget.

“We will do what is necessary to ensure that the budget is consensual,” Zhelyazkov said after a government meeting.

He said the government is ready for compromises but will not accept calls to resign.

Mario Bikarski, senior Eastern and Central Europe analyst at the risk intelligence company Verisk Maplecroft, said that reworking the budget “will be rocky with increased scrutiny from unions, business groups and the public.”

“There is broad consensus about the need for fiscal prudence,” he added in emailed comments. “However, repeated attempts to increase taxes are likely to inflame social tensions further.”

Organisers had asked demonstrators to keep Monday’s protest peaceful, warning that provocations were possible and urging people to record any such incidents.

Tensions rose when small groups of protesters moved towards the offices of the main ruling parties and started throwing plastic and glass bottles, firecrackers and stones at the buildings and at the police standing there.

Clashes then broke out between the police and young people wearing black hoodies and masks. Garbage containers were set on fire, and police vehicles were damaged. The police in full riot gear used pepper spray on protesters.

Emergency services said that several injured people were taken to hospitals, while many others were treated at the site.

“The protest proceeded peacefully, quietly, and calmly, and I congratulate the citizens for that,” Sofia police chief Lyubomir Nikolov told reporters on Tuesday, and he said the violence was caused by people who had been organised in advance and added that 71 people have been detained.

The leader of the opposition We Continue the Change party, Assen Vassilev, told reporters on Tuesday that the party plans to bring a no-confidence motion in Parliament “if the government does not resign this week.”

“This government does not have the moral right to govern the country any longer,” he added.

Even if the budget is revised, public anger about widespread corruption will keep the government unpopular, especially among younger people in the cities.

Bikarski, the analyst, said that rising pressure from the public could cause the fragile ruling coalition to collapse and lead to another early election, which would be the eighth since 2021, and he said this would hurt investor confidence.

“Such a scenario would risk negating some of the operational advantages that businesses were hoping to enjoy from joining the euro area,” he added.