In a couple of meetings expected to generate a breakthrough on four key topics on September 17, Romania’s ruling coalition deferred a final decision on the local administration staff cutting and the prolongation of the food price capping mechanism, according to Observatornews.ro. Alternative scenarios are being discussed with the participation of mayors’ associations on the former topic, while the impact of lifting the price-capping mechanism for food goods is being evaluated.
The talks will resume in a week, when the Constitutional Court is also expected to rule on the five draft laws of the second package of budgetary measures, which have already been approved by the Parliament. Among them, the draft law on magistrates’ pensions stands out.
The Romanian government promised to legislate the second package of budgetary measures by the end of August, but it repeatedly deferred the deadline.
The European Commission will evaluate the country’s progress along the Excessive Deficit Procedure (EDP) based on the first and second packages of budgetary measures on October 15. The first package, legislated in July, is expected to provide the necessary consolidation until 2026, but inherited hidden expenditures may prevent the government of prime minister Ilie Bolojan from bringing the public gap below 8% of GDP this year.
The sixth law of the package should focus on the local administration staffing and pay, but the government deferred it amid a lack of consensus among the ruling parties. While the Social Democrats (PSD) and Hungarian party UDMR have resisted the sharp solution proposed by prime minister Ilie Bolojan, it surfaced recently that such diverging views are shared by mayors of the prime minister’s Liberal Party (PNL). Several PNL mayors have reportedly warned Bolojan that they would migrate to the far-right party AUR if they are forced to lay people off, political sources told News.ro.
Mayors and county council presidents claim that they would lose support in the next elections if they imposed such austerity measures.
Development minister Cseke Attila accepted the mayors’ request to draft at the central level pay schemes for employees in the local administration at all levels.
Regarding the prolongation of the food price capping mechanism, another topic in limbo, the ruling parties seem to be evaluating the impact on inflation. PSD came up with extreme scenarios, including 15% y/y inflation by year-end, and PNL, including PM Bolojan, may not be ready to take the risk of paying the electoral cost in case the projections are correct. This is perhaps why Libertatea.ro reported that Ilie Bolojan does not exclude the prolongation of the regime after October 1, when it is supposed to expire. This is a departure from the more radical views expressed earlier by PM Bolojan on returning to market principles and removing the capping mechanism.
Meanwhile, the ruling coalition nears an agreement on the redistribution of prefect and sub-prefect posts among the parties, specifically ceding part of the posts to the Save Romania Union (USR) that joined the coalition in June 2025. The Social Democrats agreed to cede three prefect posts and the Liberals only one, according to Digi24.
USR, which initially requested nine posts, nearly a quarter of the total of 41, in line with equal distribution among the coalition’s members, will appoint prefects in three counties (Bacău, Botoșani, Timiș) and in Bucharest. USR will also get 13 sub-prefect posts from a total of 63.
The heads of several national agencies where appointments are made exclusively through political decisions were also put on the negotiating table, so that USR will control 11 of them. The final list of the agencies is to be decided in a later meeting of the governing coalition.
The public investments under PNRR and from the local budget, the fourth topic on the ruling coalition’s agenda on September 16, is heading towards an agreement as well. Specifically, the projects financed under PNRR will be prioritised while those funded under the national budget will be phased over three years. The central government insisted, however, that the local administration abstain from overcontracting, such as to avoid unpaid invoices at the end of the year, which are a threat to the budget deficit targets.
A memorandum on PNRR investments will be approved by the government on September 18.
“Government representatives mentioned that the financing of projects supported by the PNRR will be prioritised and that predictability and transparency will be ensured for supporting investments from the Anghel Saligny Program,” a government statement reads.
iulian@romania-insider.com
(Photo source: Cateyeperspective/Dreamstime.com)
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