Talks on reducing the budget deficit
The record budget deficit continues to dominate public debate in Romania.
Bogdan Matei, 06.06.2025, 14:00
The European Commission’s bi-annual economic analysis shows that Romania is the only country in the Union with excessive macroeconomic imbalances. The budget deficit is the largest in the entire community block, at almost nine 9%, and, according to the Commission, the Romanian authorities have not taken any effective measures to correct it. According to the European Commission’s analysts, the deterioration of the situation in Romania was caused, among other things, by the growing current expenses, through the increase in salaries and pensions. The Commission has called on Romania to present urgent and effective measures, or risk not meeting the deficit correction objectives by 2030 and entering procedures that will lead to the loss of some European funds starting next year.
What is known, at the moment, in Bucharest, is that a package of measures to reduce the budget deficit could be officially presented on Monday, after the negotiations that the head of state, Nicuşor Dan, has with the leaders of the four pro-European parties that could form the future government: PSD, PNL, USR and UDMR. Until then, discussions continue within the technical teams, made up of experts from the political parties.
President Dan said that none of the fiscal proposals carried by the media, from increasing VAT on some products to progressive taxation of salaries, was certain. To reduce the deficit to 7.5% of the GDP, the Romanian state needs to find 30 billion lei (the equivalent of about six billion euros) – either by reducing public sector spending, or by increasing taxes or by a combination of the two methods.
In opposition, the nationalists with AUR announced that they would not support the increase in taxes and duties, but would insist on a 10% reduction in expenses related to the functioning of the state and on the suspension, for five years, of tax benefits for some categories of workers, in industry, construction or agriculture. Meanwhile, representatives of pro-Western parties across Romania, did not shy away from criticizing the planned austerity measures, which could affect their communities. The President of the Timiş County Council, the Social Democrat Alfred Simonis, said that he would not accept the Government’s removal from the list of financing, the works on the new stadium in Timişoara and that it was unacceptable for the largest city in the west of the country to pay for the “errors of others”. Also, the leadership of the Romanian Academy firmly rejects the claims, which it calls unfounded and insufficiently documented, against its research institutes and Romanian research in general, which critics say are siphoning off public funds without producing much. (EE)
