Romania faces the danger of “government collapse” .. and officials seek to curb a record deficit

The austerity measures, which sparked popular anger and led to the collapse of governments across Europe, more than 10 years ago, due to the forefront in Romania, where officials seek to curb a record deficit.

Finance Minister Alexandro Nazari told the Financial Times that “the first package of tax increases and the freezing of spending entered into force on August 1, with plans for two additional packages later this year, despite the protests partially produced by the extremist right -wing opposition.”

“Of course, it is not easy,” Nazari said, pointing out that the coalition government is committed to approving all the necessary measures, and added: “We are all fully aware of the current budget situation.”

With 9.3% of GDP, the general budget deficit in Romania was the highest in the European Union in 2024, which is much higher than the 3% threshold stipulated in the financial rules of the Union, while the previous government was reluctant to adopt any austerity measures in the period before last year.

The austerity measures are still largely unpopular, after the country has approved one of the harshest groups of spending discounts and tax increases in Europe in the wake of the sovereign debt crisis.

In 2012, the government collapsed in Bucharest, amid anti -austerity protests, which resonated similar events in Greece, Portugal and Ireland, and this time, the Romanian government is seeking to postpone the measures.

However, hundreds of demonstrators went out to the streets of Bucharest and other cities this summer, where the leader of the “coalition for the unity of the Romanians”, George Simyoun, called for early elections and pledged to “refuse to pay the taxes” imposed by what he described as a “illegal government”.

The August package includes an increase in the highest value -added tax segment from 19 to 21%, in addition to increasing production fees, which means that the increases in public sector wages and pensions are suspended until 2026, but the most difficult measures, including reforming state -owned companies, and reducing generous pensions and other privileges of former government officials, have not yet been agreed.

“Reforming the planned retirement system aims to (cancel special privileges), such as early retirement for judges who can currently start receiving their pensions in the mid -forties,” Nazari said, adding: “These measures are necessary to ensure financial sustainability and justice.”

The basics of the Roman economy are still difficult, as the three main credit rating agencies reduced their classification to only one degree above the non -investment degree or “unwanted situation”, due to the country’s inflation rapidly and high inflation, and gross domestic product grew by 0.3% in the second quarter, with the central bank warning that growth is likely to slow down, as inflation is forced to keep the interest rate The president is at 6.5%.

The economic situation was exacerbated by a political crisis that lasted for months, after the Constitutional Court canceled in December, presidential elections due to alleged external interference.

The new government took its duties, in June, after the European Union’s supporter, Nicosur Dan, won the re -election, but the Quartet coalition is still fragile, with the escalation of tensions between partners.

The Deputy Prime Minister resigned, earlier last week, due to fraud allegations, while the anti -institutional “Save Romania” party rebelled, which Dan founded, on the decision to establish an official funeral for the first president of the country after the communist era.

Romania has received 28.5 billion euros from the European Union, and has used less than 10 billion euros of money so far.

“The coalition partners are completely aware of what is at stake,” Nazari said, noting that “preserving the money of the European Union available and benefiting from any other European money is not a left or right issue, it is a strategic choice that enhances the development of our country.”

Bucharest aims to accelerate the digitization of public services, improve the collection of taxes and local administration, and to target the regulatory authorities of sectors such as energy or communications to reduce costs and increase transparency, but Nazari acknowledged that these difficult and other reforms will not be fully implemented, except by the end of the current government’s mandate after three years from now. On the “Financial Times”

. Romania has received 28.5 billion euros from the European Union, and has used less than 10 billion of money so far.

. 9.3% of GDP … the budget deficit in the European Union, the highest in the European Union, during 2024.