Romanian government assumes responsibility for fiscal corrective package

The government of Romania assumed responsibility for the fiscal corrective package on Monday, July 7, requiring the Parliament to endorse the bill without a vote and accepting in exchange to face a no-confidence motion.

The largest opposition party, the Alliance for the Union of Romanians (AUR), announced plans to file such a motion, which must be submitted within three days to trigger a no-confidence vote in Parliament.

The package, with an estimated budgetary impact of RON 0.56% of GDP this year and 4.6% of GDP in 2026, is the first step of the process through which the new government of prime minister Ilie Bolojan aims to correct the fiscal deficit that hit 9.3% of GDP in 2024.

Ecofin is expected to evaluate at its meeting on July 8 Romania’s actions under the Excessive Deficit Procedure (EDP) after it concluded on June 20 that the country has again failed to take steps and address the European Commission’s recommendations issued on January 21 and submit by April this year the annual report. Repeated failure to take action under the EDP can result in the temporary suspension of disbursements from the European Union budget.

The government accepted several amendments to the bill, which it passed on July 4, notably accepting to cut the allowances paid from the budget to political parties, increase the taxation of gambling operators, and make temporary (until the end of 2027) the contribution to the public health insurance system charged under the bill passed by the executive on July 4 to recipients of pensions above RON 3,000 (EUR 600).

Some categories of taxpayers, such as pregnant mothers surging their maternity leave, are no longer charged this contribution, requested under the bill as passed by the executive.

(Photo source: Inquam Photos / George Călin)