ECOFIN: Romania must present the fiscal measures taken by the Bolojan government by October

ECOFIN decided this Friday that the Romanian Government must present deficit reduction plan by October 15.   The Council of EU finance and economy ministers issued a series of recommendations for Romania and set a deadline of October 15, 2025 for Bucharest to take effective action and present the necessary measures to ensure the timely correction of the excessive deficit, according to Digi24 sources. Subsequently, Romania should report on progress in implementing the recommendation at least every six months, in the spring, in the context of its annual progress report, and in the autumn, by October 15, until the excessive deficit is corrected.   ECOFIN has granted Romania a deadline of 15 October to submit its deficit reduction plan.   The Council has issued three recommendations to the Government in Bucharest: Romania must ensure that the nominal growth rate of net expenditure does not exceed a number of ceilings Romania must therefore put an end to the excessive deficit situation by 2030. The Council sets a deadline of 15 October 2025 for Romania to take effective action and to submit the necessary measures to ensure the timely correction of the excessive deficit. Subsequently, Romania should report on progress in implementing this recommendation at least every six months, in the spring, in the context of its annual progress report, and in the autumn, by 15 October, until the excessive deficit is corrected.   ECOFIN, the council of EU member states’ finance and economy ministers, was expected to endorse on Friday the European Commission’s June 4 recommendation stating that Romania, which is under the excessive deficit procedure, has failed to meet its commitments under the fiscal plan and has not taken effective measures to reduce the budget deficit in line with agreed targets, according to European Commission documents cited by Profit.ro.   The Romanian state is represented at ECOFIN by a State Secretary from the Ministry of Finance, but Romania does not have a vote on the excessive deficit procedure that concerns it. Romania is running out of time to adopt the budgetary adjustment measures by law or ordinance so that they can be sent to the European Commission next week, before the deadline of 30 June. It is essential that the measures are sent to Brussels in good time to pass the technical committees so that they reach the ECOFIN table on 8 July.   Alin Andries, State Secretary in the Ministry of Finance, who is attending the Economic and Financial Affairs Council (ECOFIN) meeting in Luxembourg, stated on Thursday evening that he will not present any fiscal measures plan, as such a plan must first be adopted by the Government or Parliament in order to be officially submitted. “Only once it is legally adopted can it be presented to the European Commission. Of course, discussions can cover many possible measures, but only adopted measures count,” Andries explained for Digi24.   “Ministers will be invited to approve further actions under the excessive deficit procedure for two member states – Romania and Belgium. Specifically, ECOFIN is expected to adopt a decision stating that Romania has not taken effective action to reduce its excessive deficit, paving the way for potential additional steps if the country does not act swiftly to correct its fiscal imbalances. This follows an earlier Council recommendation for Romania to end its excessive deficit situation by 2030. For Belgium, the Commission has proposed a revised recommendation aiming to end its excessive deficit by 2029. ECOFIN is expected to decide on further actions under the excessive deficit procedure—based on the Commission’s recommendations from the 2025 Spring Package—at its next meeting on July 8, 2025,” the European Commission states ahead of the ECOFIN session.   The ECOFIN meeting on July 8 is critical for Romania, as it is the last one before the EU institutions go on summer recess. Romania must submit its adopted measures by June 30. A positive assessment at the July 8 ECOFIN meeting—confirming that Romania’s new measures are effective and sufficient to bring the deficit back on track—would place the country in a favorable position for upcoming credit rating reviews in August and September, which precede the next ECOFIN meeting on October 10.   In recent weeks, representatives and leaders from PSD, PNL, USR, and UDMR have discussed possible measures to be adopted by a government formed by a coalition of the four parties. However, technical discussions have not yielded concrete results, with each party mainly adding its own proposals to the list.   Last week, despite seeming close to an agreement—with support for Ilie Bolojan, PNL president, as Prime Minister—government formation efforts stalled again after Bolojan and Romanian President Nicusor Dan failed to agree on including a VAT hike in the fiscal stabilization package. Although Dan does not have authority over fiscal policy, which is the domain of the Government and Parliament, he pledged during his campaign that VAT would not increase during his term.