Former president Klaus Iohannis, former prime minister Marcel Ciolacu, and former Senate president Nicolae Ciucă were reportedly warned that Romania risks default if measures to address its growing budget deficit were not taken, according to an investigation by Europa Liberă Romania. Nevertheless, Romania’s top officials seemed to forego the country’s finances during the 2024 electoral year.
The publication uncovered six official documents labeled “strictly confidential” through which the three officials were informed, between August and December 2024, about the imminent risk that Romania would end the year with a much larger budget deficit than the one assumed at the beginning of the year.
According to one of the documents, titled “Budgetary risks for the year 2024 taking into account the execution of the consolidated general budget for the first 9 months,” Romania’s finances were in free fall.
The reported, signed by finance minister Marcel Boloş, state secretaries Alin Andrieş and Dana Pescaru, and the head of ANAF, Nicoleta Mioara Cîrciumaru, noted that “in the absence of urgent budgetary measures to limit and reduce budget expenditures for the remaining period until the end of the year, there are major risks that the assumed deficit target will be exceeded, with the consequence of increasing the cost of financing the budget deficit.”
The following five documents all warned of similar problems.
Contacted by Europa Liberă Romania, former minister Marcel Boloş confirmed the existence of the documents that the briefings were sent to the Presidency, the Government, and the Senate under confidential status because their appearance in the public domain could have generated a crisis of confidence in Romania’s ability to pay its debts.
The former minister also said that at the time of his departure from the Ministry of Finance (on December 24), the country’s budget deficit was 8.43%, that is, RON 148 billion. Romania would end the year with a deficit of 9.3%, that is, nearly RON 153 billion.
The last of the documents sent to Iohannis, Ciolacu, and Ciucă also previewed a series of measures that the Romanian Government needed to take in order for the country not to enter default. The document mentions, for example, that the Executive must adopt a series of urgent measures regarding public sector salaries, bonuses, and holiday vouchers. If those measures had not been taken, the 2025 budget deficit could have reached 14.3% of GDP, the financial officials warned (considering that the European rule for a financially safe country is a deficit of 3%).
The documents come as the current government, led by center-right leader of the National Liberal Party, Ilie Bolojan, has adopted a series of tough measures targeting the deficit. These include a VAT hike, increases in excise duties, as well as spending caps in the public sector. Further fiscal consolidation measures are expected later in the year, with the government aiming to reduce the deficit to below 7% of GDP in 2025.
Romania recorded a 9.3% budget deficit in 2024 – the highest in the EU – prompting the ECOFIN council to issue a warning and demand immediate corrective measures ahead of its July 8 meeting.
In a connect event, last week, Vlad Gheorghe, leader of extra-parliamentary opposition party DREPT, filed a criminal complaint against former prime minister Marcel Ciolacu “for lying about the state of the economy and budget deficit.” Gheorghe, along with other commentators, allege that Ciolacu splurged on public funds in order to increase the scores obtained by him and the Social Democratic Party during the 2024 local, European, parliamentary and finally presidential elections.
(Photo source: Inquam Photos | Daniel Stoenciu)
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