The Government will borrow heavily

The Romanian Government estimates that it will need approximately 275 billion lei to cover the budget deficit

Roxana Vasile, 29.01.2026, 13:50

The government in Bucharest estimates that it will need approximately 275 billion lei this year, equivalent to around 55 billion euros, to cover the budget deficit, which is expected to exceed 6 percent of the GDP, as well as to refinance the public debt maturing this year, amounting to 3.25 billion euros. This is why the PNL-PSD-USR-UDMR coalition executive is considering taking out loans of approximately 160-170 billion lei on the domestic market and approximately 21 billion euros on the foreign market, as shown in a draft government decision.

According to the Ministry of Finance, which initiated the document, the estimated volume on the foreign market is to be secured by issuing Eurobonds worth 10 billion Euro, with the remainder to be raised from advantageous loans through European Union programs such as the NRRP and SAFE, from loans from international financial institutions, and from private investments. According to the latest Eurostat data, Romania is among the European Union countries with the sharpest increases in public debt relative to GDP in the last year. This is in a context where, at the European Union level, government debt exceeded 82% of the GDP, and in the euro area, the level rose to over 88%.

Compared to the previous year, debt has increased in both the EU and the eurozone, a sign that fiscal adjustments are slow and public spending remains high, according to economic journalists, who say that public debt remains one of the greatest vulnerabilities of the European economy. The differences between member states are very large – in France, Italy, and Spain, public debt is well over 100%, while at the opposite end of the spectrum, in Bulgaria, Estonia, and Luxembourg, it is below 40% of the GDP. In Romania, public debt is below the European average – almost 59% of the GDP – but it is constantly increasing.

The huge budget deficit that forces the state to borrow to finance its current expenditure, not just investments; spending exceeding revenue even in periods of economic prosperity; high interest rates on existing loans and inflationary pressures – all these factors combined make Romania more vulnerable, despite having a lower public debt than other countries. “In recent years, Romanian governments have increased public debt from around 60 billion Euro in 2015 to around 200 billion today,” economist Radu Nechita told Digi24. However, he says, “tripling the debt in nominal terms is a sign of budgetary recklessness and fiscal irresponsibility on the part of the political class.”

The costs of this fiscal policy are directly reflected in taxpayers’ lives and in the private economy. The only good thing about this situation, says the economist, is that the authorities understand that things cannot continue this way, and that the minimum fiscal objective should be a balanced budget in any year when there is economic growth. (MI)