Romania’s finance minister and SocDem leader clash over budget execution interpretation

Nothing exceptional has happened since May, when the centrist coalition that drafted the 2026 budget collapsed, and budget execution remains in line with the plan for a cash deficit of 6.2% of GDP for the full year, Nazare added.

His remarks contrast sharply with the rhetoric coming from the Social Democrats, who accused the previous Liberal (PNL) prime minister, Ilie Bolojan, of fiscal slippage and of leaving behind a dramatic budgetary situation.

The conflicting interpretations offered by Social Democrat leader Sorin Grindeanu, the de facto leader of the governing coalition, and the finance minister on concrete fiscal data may set the stage for wider disagreements over the 2026 budget revision and do not bode well for the preparation of the 2027 budget. Grindeanu has already announced plans for public spending to relaunch the economy, some of which have been echoed by prime minister Luca Niculescu, but the proposals seem to lack credible financing sources beyond “improving tax collection”. The disagreement has also raised questions about taxation policy: when asked about further tax rate increases, finance minister Nazare said that “nobody wants this”, adding that “we need sustainability”.

Last week, the Finance Ministry provided a detailed analysis of budget execution in H1, reconciling the ESA data reported by Eurostat with its own cash data, after the 9.2%-of-GDP (quarterly, seasonally-adjusted) deficit reported for Q2 fuelled criticism from the Social Democrats, who recently took over the government.

Despite the technical data provided by the Finance Ministry and Nazare, PSD leader Sorin Grindeanu continued to claim that RON 30 billion (EUR 6 billion, or 1.5% of GDP) in payments to contractors were deferred by the interim government led by Liberal (PNL) prime minister Ilie Bolojan, Economedia.ro reported. Grindeanu accused the government of postponing these payments to make the public deficit figures look better.

Notably, Nazare has headed the Finance Ministry under three successive political arrangements: the centrist coalition in place before May, which included PSD and PNL; the interim government without PSD; and the current government led by independent prime minister Luca Niculescu, in which the Social Democrats hold key positions.

PSD president Grindeanu argued that the austerity measures promoted by Bolojan have impoverished the population without resolving the budget problems. He has also announced that Social Democratic ministers will present concrete economic measures next week.