Romanian PM confident in local administration reforms and magistrates' pensions law

Prime minister Ilie Bolojan said on November 6 that he hopes that the ruling coalition will manage to legislate by the end of this month the rest of the second package of budgetary measures, namely the public administration streamlining law and the law on magistrates' pensions. Unless the law on the public administration is legislated, it is not possible to have next year's budget planning designed "in a healthy way," PM Bolojan stressed.

The ruling coalition has reportedly agreed this week on reducing the number of employees in the local administration by 13,000, but the final document stating this would be drafted by the Ministry of Development by next week.

In addition to this, Bolojan indicated that the magistrates' pensions law "is a must," and he hopes that it will be adopted within two weeks at most, News.ro reported. These are, however, highly optimistic expectations given that the Social Democrats argue for "broader consultations" with the magistrates' bodies, which are rejecting any discussion on the matter.

Unless the second package of budgetary measures is adopted, the fiscal consolidation towards a 6% of GDP deficit in 2026 will not be credible to investors and will result in a public debt interest of RON 60 billion or 3% of GDP next year, PM Bolojan argued. The interest on public debt will account for nearly half of the deficit, he stressed.

Ilie Bolojan also reminded that, besides the law on magistrates' pensions, there is another law in the second package that needs to be revised in line with the Constitutional Court's recommendations – the law on fiscal measures.

"Practically, at the moment, [two laws] are blocked by the decisions of the Constitutional Court. [One of them] is the fiscal package law, where, I understand, two of the articles have been declared unconstitutional. We will wait for the motivation, I hope that it will appear in the coming days, so that both on the fiscal package and on the package on magistrates, we can make some decisions and come back for adoption," the prime minister added.

The fiscal package law includes, among others, the so-called "tax on affiliates," which restricts the deductibility of expenditures with foreign affiliates, posing significant problems to multinational companies.

PM Bolojan emphasised that these projects in the second package of budgetary measures "have effects related to the collection of budget revenues, but also effects of social equity, of minimum social justice."