The 2025-2028 Ruling Program published by the government of prime minister Ilie Bolojan is “the best in past 35 years [since the fall of communism]” and could avoid the need to hike the standard VAT rate from 19% currently, according to Eugen Rădulescu, advisor to the central bank (BNR) governor quoted by Bursa.ro. Independent analysts have been more reserved, however.

According to Rădulescu, the proposed economic policies would not generate a significant inflationary surge, except for possible effects from the liberalization of the electricity and gas market.

Regarding the sustainability of the strategy’s implementation, the advisor to the BNR governor drew attention to the fact that full implementation could encounter opposition.

"I don't know if the government will manage to do everything it says there because there will be fierce opposition from those who will see their privileges curtailed. I'm already hearing that it can't be one way or the other. It won't be easy to apply," he warned, giving the example of special pensions and the retirement age for certain privileged categories. However, even the BNR may resist some measures included in the Ruling Program – specifically the proposed tax on banks’ “excessive” profits.

Regarding the VAT regime, Rădulescu criticized the large number of tax exceptions, arguing that simplifying the system is necessary. "The disappearance of the second reduced rate, leaving only one, 9%, and only for food, medicine, and firewood, is a very good thing not only for budget revenues but also for putting order in the economy," he said.

On the subject of dividend tax, Rădulescu argued that its increase is justified, as it reduces fiscal distortions that allow for arbitrage between regulations. At the same time, he welcomed the measures aimed at restructuring the budgetary apparatus, considering the reduction of central administration personnel by 20% as a necessary measure, according to Digi24.

The ruling strategy unveiled by prime minister Ilie Bolojan includes, according to the BNR official, fiscal, administrative, and budgetary reforms that could bring stability and economic balance, but their implementation depends on the executive's ability to manage systemic resistance.

However, the ruling strategy “reveals a fragmented structure and a certain lack of internal coherence,” according to a column published in Economedia.ro by Valeriu Ivan, economic analyst, Center for Analysis and Forecasting for Strategic Orientations.

The document contains “the result of reflections on the mechanisms of sustainable development of the Romanian state” and less a strategy showing the path from the point where we are to the desirable and desired objective, according to Ivan.

“Instead of proposals based on a thorough diagnosis of the causes that led to the accumulation of budgetary imbalances and chronic dysfunctions of the administration, the Program limits itself to repackaging commitments already known and assumed in other strategic documents, without bringing new elements of substance or concrete solutions that would try to overcome the structural limits of the current social configuration,” the column reads.

iulian@romania-insider.com

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