July 8, 2025 UPDATE

A roundup of local and world news

Newsroom, 08.07.2025, 20:06

ECOFIN On Tuesday in Brussels Romania presented the new measures aimed at reducing the budget deficit, as part of its commitment to bringing the budget deficit below 3% of GDP in the next seven years. 12 EU states have a budget deficit, of which eight are in the excessive budget deficit procedure, but Romania had by far the highest deficit level in 2024, at 9.3% of GDP. On Tuesday, Finance Minister Alexandru Nazare was presenting to his counterparts in the EU’s Economic and Financial Council the austerity measures to be taken by his government to tackle the financial situation. This is the first of a number of financial packages envisaged by the government, and one which the Ilie Bolojan cabinet has assumed responsibility in Parliament. If the measures presented are well received, Romania will present the results of the application of the measures in Brussels on October 15. It will also present the Council with a new set of measures to complement the first package, depending on the outcome of the latter.

HEADWAY Romania has made significant headway in terms of the Venice Commission recommendations regarding the justice laws, but has failed to take measures to strengthen independent governance and the editorial independence of the public mass-media, whereas the political pressure on editorial independence is affecting the journalists’ work, says a European Commission report concerning the situation of the rule of law in Romania published on Tuesday. The legislative unpredictability, the frequent use of government emergency ordinances, the issues related to the quality of legislation and the burden of regulation remain the main concern of enterprises and civil society organisations, the report also says. Among other things, the Commission recommends that Romania take measures to ensure the independence of the high-ranking prosecutors and for the effective penal prosecution of the crimes in the legal system, including those involving corruption as well as to introduce rules regarding MPs lobbying and ensure the effectiveness of the system of having one’s fortune declared.

RATE The annual inflation rate will considerably increase in the following months under the transitory impact of the expired scheme of capping prices in electricity and the increased VAT and excises starting August 1, a communiqué of the country’s Central Bank (BNR) says. According to the sources, a series of uncertainties are still related to the supplementary corrective measures most likely to be implemented with a view to carrying on budgetary consolidation according to the structural-budgetary plan on medium term agreed upon with the European Commission and the excessive deficit procedure. Uncertainties and big risks against the economic activity prospects are also expected from the exterior, such as the war in Ukraine and the situation in the Middle East, but mainly from the ripples caused by the US trade policies. The BNR board of directors decided in its session on Tuesday to keep the monetary interest rate at 6.50% a year. They also decided to keep the Lombard interest rate at 7.50% and the interest rate on deposits at 5.50% a year.

HEATWAVE Romania had another hot day on Tuesday, with thermal discomfort across the country, except for the Black Sea coast. The worst hit by the latest heatwave is the south, including the capital Bucharest, which is under a code red alert for excessive heat until Wednesday. According to doctors, the human body is subjected to additional stress, and the categories at risk are young children, the elderly and the sick, as prolonged exposure to extreme temperatures leads to disruptions in the way the body works. Ambulances are on alert, a number of pharmacies are providing first aid, and special points have been installed on the streets where people can receive water and medical assistance and stay cool. On top of the sweltering heat, Monday evening also saw storms, torrential rain and hail storms. Red and orange code warnings for atmospheric instability are in place for most of the country. Some places have experienced water supply problems due to power outages at several pumping stations. Strong winds knocked down trees that fell onto the road, pavements and cars, broke electrical wires and tore off roofs. Road travel and public transport were disrupted in some places. Temperature wise, the highs today are between 30 and 40 degrees Celsius. Rain showers and thunderstorms are expected in the afternoon, with flash floods forecast in the west, north and centre.

PROTESTS Employees of state pensions funds protested on Tuesday against working conditions and the cut in their incomes, said their trade union. The latter added that protests will continue all week and did not rule out the possibility of an all-out strike if their demands are not resolved. Also on Tuesday, they announced that employees from the Ministry of Investments and European Projects are also staging a protest outside their institution. Their trade union said it sent a letter to prominent members of the European Commission emphasizing the risk with respect to the administrative capacity to manage European funds as a result of measures to reduce the incomes of the staff. On Monday, the coalition government in Bucharest formed by the Social Democratic Party, the National Liberal Party and the Democratic Union of Ethnic Hungarians in Romania assumed responsibility in Parliament for a first set of fiscal measures aimed at reducing the budget deficit. Dissatisfied with the solutions provided, trade unions in the health care and education sectors staged a protest outside Parliament. Protests have also been announced by employees of the National Administration of Romanian Waters and the Ministry of Agriculture. They all believe that the government has chosen the easy way out, namely reducing the population’s incomes and raising taxes.

(bill)