The government of Romania is to submit to Parliament for endorsement under simplified procedure, with no debates or a vote, the second package of fiscal measures, prime minister Ilie Bolojan announced at a meeting of the National Liberal Party (PNL), according to Antena3.ro.
The procedure, also used for passing the first package of reforms, allows for the opposition to file a no-confidence motion against the government, but in the absence of such a motion or if the government survives the no-confidence vote, the package is passed.
Romania strives to bring the public deficit, 8.65% of GDP in cash terms (9.3% under ESA terms) last year, under 8% this year, versus an initial target of 7.1%. The first package of reforms is supposed to have achieved this year’s target while smoothing the way towards the 6.4% of GDP target set for 2026 under the 7-year fiscal consolidation plan sketched under the Excessive Deficit Procedure (EDP).
The second package of reforms was first announced for the end of July, then deferred by mid-August, and now it is supposed to be legislated by the end of August. Its impact on this year’s public budget will not be significant, but it is supposed to generate more revenues and reduce spending starting in 2026.
The second package will include a series of chapters, all of which have already been published for consultations.
Initially, there were only two chapters envisaged: on public administration (particularly local administration) and state-owned enterprises. Both chapters were aimed at cutting the unnecessary spending, extended mainly on political grounds and clientelism. Measures to streamline the use of funds in the public health and education systems were then added, prompting protests from trade unions.
The amendments to the law on magistrates’ pensions were also added, despite fierce opposition from magistrates’ bodies. Finally, the Finance Ministry came up with a package of tax reforms, including higher taxation of capital gains, higher local taxes, and a special tax on profits supposedly shifted by multinational companies.
The government passed on August 19, regulating the public investments financed from the national budget under the Anghel Saligny scheme and by the European Union under the National Relaunch and Resilience Plan (PNRR), but it is unclear whether this will be part of the second package or will be legislated separately.
Antena3.ro mentions Anghel Saigny projects as part of the second package, but it does not outline the SOEs reforms, while Hotnews.ro reporting on the same package, outlined only the Finance Ministry’s fiscal measures and the magistrates’ pensions. The government has never clearly outlined the components of the second package, except initially when naming SOEs reforms and the public administration reforms.
According to the sources consulted by Antena3.ro, the package is expected to be adopted in a government meeting on Monday, August 25, and further submitted to Parliament. Once the government submits the package under the simplified procedure, the opposition may file a motion of confidence against the government.
iulian@romania-insider.com
(Photo source: Inquam Photos/George Calin)
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