THE WEEK IN REVIEW
July 7-11, 2025
Leyla Cheamil, 12.07.2025, 13:52
Romanian government assumes responsibility for first package of fiscal measures aimed at reducing budget deficit
In Bucharest, the PSD-PNL-USR-UDMR coalition government assumed responsibility, on Monday, in Parliament, for the first package of fiscal measures aimed at reducing the budget deficit. These received a negative advisory opinion from the Economic and Social Council, because they lead to a decrease in the purchasing power of Romanians and affect the stability of society. The most important measures provided for in this fiscal package concern the increase in VAT, the elimination of the exemption from paying state health insurance for pensioners whose monthly income exceeds 3,000 lei (600 euros), or the increase in excise duties on tobacco, alcohol and fuels. Also, salaries and pensions in the public system remain capped, including next year. The government resorted to these measures because of the country’s very large deficit, and the risk that Romania would be downgraded by rating agencies to the “junk” category, not recommended for investment. Dissatisfied with the decrease in income following the austerity measures, employees of several public institutions in Bucharest and around the country organized spontaneous protests. Trade unions also mobilized and organized joint protests in front of the Government, Parliament, at the headquarters of political parties, and some ministries. On Tuesday, the first package of fiscal measures was presented by Finance Minister Alexandru Nazare at the meeting of the Council for Economic and Financial Affairs of the European Union (ECOFIN Council). A second package of fiscal measures will be launched in decision-making transparency by the end of this month, and the measures include – according to Prime Minister Ilie Bolojan – reforms targeting special pensions obtained by some professional categories, state-owned companies, as well as central and local administration. Another priority is attracting European funds.
Moody’s report for Romania
Romania’s fiscal deficit could reach 7.8% of GDP this year and 6.1% in 2026, if all three packages of measures prepared by the Ilie Bolojan cabinet are fully implemented, according to the latest report by the international rating agency Moody’s. The agency considers the fiscal measures recently undertaken by the Bucharest Government as ‘an important step’ towards balancing the budget, but warns that any deviation from the assumed plan could undermine stabilization efforts and put additional downward pressure on the country’s sovereign rating. Romania benefits from a ‘Baa3’ rating assigned by Moody’s.
Motion of censure filed by the nationalist opposition against the executive
A motion of censure filed by the nationalist opposition against the PSD-PNL-USR-UDMR coalition executive led by Liberal Ilie Bolojan was presented in the Bucharest Parliament on Thursday. The initiative was initiated after the government assumed responsibility for the first package of austerity measures to reduce the budget deficit. Entitled ‘They ruined the country and now they are forcing Romanians to pay the bill – out with the hypocritical Government’, the motion will be debated and voted on Monday, July 14. If the motion receives the vote of the majority of deputies and senators, then the Bolojan Government is dismissed, otherwise, the project for which the executive assumed responsibility is adopted. Thanks to the comfortable number of parliamentarians of the governing coalition, the executive does not have, however, great worries that it could be dismissed.
Romanian President Nicuşor Dan participated in the London videoconference of the so-called “coalition of the willing”
Romanian President Nicuşor Dan participated on Thursday in the London videoconference of the so-called ‘coalition of the willing’. At the end of the meeting, the French president and the British prime minister – who called on world leaders to exert increased pressure on Russian President Vladimir Putin by imposing new sanctions to ensure a ceasefire in Ukraine – announced the establishment of a military force to guarantee the security of the former Soviet republic after the ceasefire. The Franco-British expeditionary force would serve as the basis for the future international structure consisting of 50,000 soldiers, and all countries in the coalition of volunteers can participate with soldiers capable of being mobilized in a major commitment. Also on Thursday, in Rome, in a speech delivered at a conference on the reconstruction of Ukraine, the President of the European Commission, Ursula von der Leyen, announced that the European Union will mobilize 2.3 billion euros for the reconstruction of Ukraine. At the conference in Rome, Romania was represented by Foreign Minister Oana Ţoiu.
European Parliament rejects motion of censure against the Commission
The European Parliament rejected, on Thursday, by a large majority, the motion of censure against the Commission, initiated by Romanian MEP Gheorghe Piperea. The document accuses the EU executive of a lack of transparency regarding the acquisition of anti-COVID vaccines, of violating the European Treaty in the case of the Union’s rearmament plan, and of illegal intervention in the electoral processes in Romania and Germany. The President of the European Commission, Ursula von der Leyen, rejected the accusations and considers the motion to be just a political spectacle by the extremes in the European Parliament, who, in their countries, advocate for the division of the Union.
Romanian football teams in European competitions
In the most important continental competition, the Champions League, the Romanian football champion, the Bucharest team FCSB, defeated Inter Club d’Escaldes, from Andorra, with a score of 3-1, on Wednesday, in Bucharest, in the first leg of the first preliminary round. The return matches are scheduled for next week. Also this week, the winner of the Romanian Football Cup, CFR Cluj (north-west) and the Hungarian team Paksi FC finished in a draw, 0-0, on Thursday evening, at the Paksi FC Stadion in Paks, in the first leg of the first round of the Europa League. The second leg will take place on July 17, in Cluj-Napoca.
