Romania Moves to Avert EU Sanctions

Romania’s Finance Minister Alexandru Nazare announced a new fiscal package designed to stabilize the country’s budget and avoid EU penalties for excessive deficit. The plan, already discussed with the European Commission, is expected to receive favorable assessment if adopted before the upcoming ECOFIN Council, CE Report quotes AGERPRES

The measures are projected to generate 9.5 billion RON in revenue for 2025 and lead to total budgetary impact of 10.75 billion RON. For 2026, the revenue impact is estimated at 35 billion RON, with 57 billion in expenditures, including salary and pension freezes.

Nazare highlighted that Romania has been under the EU’s excessive deficit procedure for five years and warned that continued noncompliance limits the country's influence in EU financial decisions. He also emphasized the urgency of passing the package to prevent suspension of EU funds and ensure access to loans from the National Recovery and Resilience Plan.

The draft law includes tax hikes such as raising the standard VAT from 19% to 21%, increased excise duties, higher dividend tax (from 10% to 16%), and new levies on banks and gambling. Pensions above 3,000 RON will also face higher social contributions.

Two fiscal responsibility measures were introduced: mandatory annual reporting to Parliament by the Prime Minister and Finance Minister, and increased transparency in budget execution.