BUCHAREST – Romania’s 2025 budget is expected to pass easily through parliament, but deficit-reducing spending cuts have already drawn opposition criticism and protests, threatening the chances of the ruling coalition’s candidate in May’s presidential election.

Romania has the highest budget deficit in the EU – 8.65% of GDP last year – and has asked the European Commission for permission to reduce it to below 3% over seven years. To achieve this goal by 2031, Bucharest has pledged to cut budget spending and increase revenues by eliminating tax exemptions.

The budget was supposed to be adopted at the end of 2024, but was postponed to avoid influencing the presidential and parliamentary elections. However, as the presidential elections will be held again in May, the so-called “prudent” budget – so called by Finance Minister Tánczos Barna (Democratic Alliance of Hungarians-UDMR) – still poses a risk.

In order to reassure the business sector, which demands stability and predictability, the budget was debated in parliamentary committees until 4 am on Tuesday. The plenary session convened on Wednesday with the aim of passing the budget by Thursday morning.

One of the deficit-reducing measures is to cut the number of public sector employees. Downsizing began in the Senate on Monday, where the new liberal president, Ilie Bolojan, faced protests from employees. The Chamber of Deputies also approved staff cuts on Wednesday.

The same measure is expected to be implemented in the ministries. However, Agriculture Minister Florin Barbu told parliament that he “will not fire any employees of the ministry or its subordinate institutions across the country.

Another measure aims to increase state revenues, an annual goal for Bucharest.The finance minister on Wednesday spoke of a “prudent increase in revenues”.

In addition to public sector dissatisfaction, the private sector is also unhappy, affected by measures taken in December that eliminated tax exemptions for individuals working in agriculture, construction and IT, and increased taxes for small and medium-sized enterprises.

Following the adoption of these measures, several protests have taken place, including a “Japanese strike” by Bucharest metro workers on Wednesday. Further protests are expected in the coming months.

The rushed budget discussions have been criticised by extremist parties and the pro-European USR (Save Romania Union), which fears that problematic provisions may have been included in the text. On Tuesday, for example, a USR lawmaker discovered that the Constitutional Court’s budget included more than €140,000 for medication for former and current judges.

The governing coalition’s presidential candidate for the May 4 elections, Crin Antonescu, has avoided commenting on these measures. In all his public appearances, he tries to present himself as an independent candidate.

“I do not represent and do not support the two parties” (PSD and PNL), Antonescu, a former PNL president, told Europa FM on Wednesday.

The 2025 budget and its subsequent implementation are crucial for Romania’s financial stability. S&P changed Romania’s outlook to negative on 24 January, following a similar decision by Fitch in December.

(Catalina Mihai | Euractiv.ro)

Source: Euractiv.com