Romania’s ruling coalition promises 2026 budget draft this week despite divergences

The four-party ruling coalition in Romania decided, after a meeting marked by still significant divergences on March 2, that a budget closing meeting would take place two days later on March 4 to finalize all chapters of the 2026 budget and adopt the final form agreed upon at the coalition level, according to Ziarul Financiar citing a press release of the National Liberal party (PNL).

One of the key disagreements between the parties regards the so-called “solidarity package,” largely subsidies for recipients of low pensions and other social subsidies, requested by Social Democrats (PSD) and only partly accommodated by the Liberal (PNL) finance minister Alexandru Nazare.

While PSD estimates a cost of RON 3.5 billion (EUR 700 million) for the package, Nazare agrees to allocate only RON 1.5 billion according to Hotnews.ro. The differential, some EUR 400 million, accounts for roughly 0.1% of GDP – which is a small amount compared to the entire budget, PSD argues.

The Social Democrats also advocated for enough budgetary allocations for investments.

Romania notified the European Commission about its commitment to draft the 2026 budget with a deficit of 6.2% of GDP under cash terms – consistent with the 6.4% under ESA terms stipulated under the country’s seven-year fiscal consolidation plan. The plan assumes 1% GDP growth and average consumer price inflation of 6.5% (3.5% y/y at the end of the year).

The budget construction is facilitated this year by robust Resilience Facility funding available, some EUR 10 billion (2.5% of GDP, of which 1.75% of GDP in grants), while the country expects to absorb EUR 5 billion (1.25% of GDP) in cohesion funds as well. Failure to complete projects initiated under RRF could, however, end in financing them from the national budget, with a negative impact on the deficit.

Finance minister Alexandru Nazare presented a budget projection to the coalition leaders in the March 2 meeting, according to Hotnews.ro. By March 3 in the morning, coalition leaders were expected to receive a written draft budget from the Ministry of Finance. They will then analyse it, following that on March 4, at 9 AM, a new meeting will be held to finalise the project.

Through a press release sent by the PNL, the coalition leaders announced that each presented "observations and proposals regarding budget allocations for essential areas, with the common objective of building a sustainable, realistic budget oriented towards the major needs of citizens and the economy."