On Wednesday, July 2, 2025, the Romanian Prime Minister presented at Victoria Palace an ambitious fiscal package aimed at stabilizing public finances and reducing the budget deficit. Strategically, the package combines spending cuts with revenue increases to prevent an economic crisis similar to that experienced by Greece.
The Prime Minister stressed that fiscal adjustment cannot rely solely on spending cuts, as these cannot be drastically reduced overnight, while Romania’s tax revenues remain among the lowest in the European Union. He also highlighted the high level of tax evasion and misuse of public funds, which undermine budget revenues and erode citizens’ trust.
The Government plans to adopt three legislative packages this summer, covering spending cuts, revenue increases, and prioritization of strategic investments. The ultimate goal is to regain citizens’ and financial markets’ trust — crucial for long-term economic stability.
Key proposed measures
- VAT restructuring:
Two rates: 11% and 21%.- 11% for medicines, food, water and sewage services, irrigation water, books, firewood, and district heating.
- 21% for all other goods and services.
The HORECA sector will temporarily benefit from 11%, but this may end by October if revenues do not improve.
- Excise duty increase:
Excise taxes on alcohol, fuel, and tobacco will increase by 10%, with a partial rebate scheme for transport companies. - Capping pensions and public wages:
In 2026, pensions and public sector wages will be capped, responding to the unsustainable increases recorded in 2024. - Expanding the health contribution base:
Pensioners with pensions above 3,000 lei will contribute, as certain exemptions are removed, aiming to increase contributors to over 8 million. - Additional taxes on banks and gambling:
Higher taxes on bank profits and gambling winnings, targeting a 30% increase in revenues from these sectors. - Higher teaching workload:
Teachers will teach two more hours per week (18–20 hours), with no salary cuts but lower overtime costs. - Scholarship reform:
- Merit scholarships to be awarded only to top-performing students in limited numbers.
- Social scholarships strictly for disadvantaged students.
All measures are expected to take effect on August 1, 2025, and will be published for public consultation.