Acting minister of finance, Alexandru Nazare, presented the updated situation regarding the implications of the Fiscal Responsibility Law 69/2010 at the government meeting on Wednesday, August 19. According to the latest official Eurostat data, Romania's public debt reached 60.1% of GDP at the end of the first quarter of 2026.

Romania has been under Excessive Deficit Procedure since 2020. Romania received recommendations (Council recommendation of July 8, 2025) to maintain expenditures within the stipulated limits (the annual ceiling on the annual increase in net expenditures being 2.6% in 2026, 4.6% in 2027, 4.4% in 2028, 4.2% in 2029, 4.0% in 2030.

According to the estimates of the Ministry of Finance, cited by Agerpres, the public debt calculated according to the European methodology (ESA) is expected to reach 61.8% of GDP at the end of 2026, 63.3% at the end of 2027 and 63.9% at the end of 2028, before gradually entering a downward trajectory.

According to Nazare, citing Law 69/2010, exceeding the 60% of GDP threshold activates additional rules regarding spending control and gradual debt reduction.

"What this means in concrete terms: Romania has a very clear limit on new budget commitments. As long as the debt remains above 60% of GDP, the government cannot approve measures that increase total personnel expenses or total social assistance expenses. In this context, any initiative with a budgetary impact must be substantiated and calibrated within the limits of the fiscal-budgetary framework in force and the expenditure envelopes established by the Fiscal-Budgetary Strategy, with a complete assessment of both the immediate impact and the annualization effects and medium-term risks. This approach must constitute the reference framework, including for the finalisation of the new payroll law, but also for other initiatives with an impact on permanent expenses", explained Nazare, as reported by Agerpres.

He emphasised that this approach must also form the basis for the drafting and implementation of the new Wage Law, among others.

According to Fiscal Responsibility Law No. 69/2010, exceeding the 60% of GDP threshold for public debt imposes on the government the obligation to initiate a debt reduction program and prohibits the adoption of measures that increase total personnel expenses or social assistance expenses, restrictions maintained until the debt decreases below this threshold.

Measures and restrictions when exceeding the 60% of GDP threshold:

• Freezing spending: The government can no longer approve any measure or law that would increase the total envelope of personnel expenses (public sector salaries) and social assistance expenses.
• Debt reduction program: The executive is obliged to initiate and implement a special program aimed at gradually bringing the public debt ratio below the limit of 60% of GDP.
• Approval of laws: Corrective and budget deficit reduction measures must be promoted and adopted through normative acts at the law level no later than the semester following the one in which the threshold was exceeded.
• Informing the government: The Ministry of Finance has the duty to present an official report to the Executive as soon as the threshold is exceeded according to official data (validated by Eurostat).

iulian@romania-insider.com

(Photo source: Gov.ro)