New fiscal measures, close to completion
The Romanian government will take responsibility for a new package of measures regarding public spending next week.
Ştefan Stoica, 29.08.2025, 14:00
The broad coalition government in Bucharest has prepared six draft laws that will be part of the second package of fiscal measures, aimed at reducing budget spending and for which the government will take responsibility in Parliament next week. These measures target areas such as taxation, reform in local administration, healthcare, state-owned enterprises and large regulatory agencies, as well as the reform of special pensions for magistrates. The executive hopes that, from a budget deficit of over 9%, the largest in the European Union, to reach one of around 7%. The cumulative effects of the two packages would mean savings of 40 billion lei, approximately 8 billion Euros. The government is working, however, under great social pressure, which calls into question the implementation of all reforms targeting the costs of public systems, reforms in the absence of which Romania risks getting stuck.
Thus, the measures in the first budget recovery package have generated protests by the teachers, who have had their teaching hours increased and thus will teach more crowded classes. They have been picketing the headquarters of the Ministry of Education for three weeks, demanding the resignation of Minister Daniel David and threatening to boycott the start of the school year on September 8. In their turn, magistrates have decided to suspend their activity, dissatisfied with the reform in the second package that would gradually increase their retirement age to 65 and reduce their pension amount. In the case of magistrates, pensions amount to thousands of Euros and sometimes exceed 10 thousand Euros. Last but not least, the National Union of Communes and Cities in Romania announced the start of an indefinite strike, after the government decided to reduce the number of employees in local authorities by 25%. The Liberal Prime Minister Ilie Bolojan, whose administrative model that he imposed in the western county of Bihor established him as an authentic and efficient reformer and propelled him to the top of Romanian politics, appears determined to move forward.
The second package will be assumed by segments, so that any appeals accepted at the Constitutional Court should not compromise it in its entirety. The populist and ultranationalist opposition in Parliament threatens to file a no confidence motion, as it did, unsuccessfully, after the government assumed responsibility for the first package of budget spending reductions. Against this tense political and social background, the Ministry of Finance published the latest data on the consolidated budget deficit. It rose to 4.04% of the GDP after the first seven months of the year, from 3.68% at the end of June, and reached 76.44 billion lei, i.e. over 15 billion Euros. As a percentage of the Gross Domestic Product, expenditures for 2025 increased by 0.7% compared to the same period in 2024. The budget for the current year is built on an economic growth of 2.5% and a budget deficit of 7% of the GDP. (LS)
