Romania's government, led by Prime Minister Ilie Bolojan, has published its 2025-2028 Ruling Programme, outlining broad reforms aimed at modernising state institutions and restoring fiscal discipline after the public deficit reached 9.3% of GDP in 2024.

The 88-page document outlines general objectives but leaves key policy details to be finalised, particularly the fiscal consolidation plan required under the European Commission’s Excessive Deficit Procedure.

Finance Minister Alexandru Nazare confirmed that the fiscal plan, due before the ECOFIN meeting on July 8, is still under preparation and subject to consultations with European Commission experts.

The programme is structured into two main sections—Principles and Priorities—covering reforms in each sector, with high importance given to public finance and central and local administration.

Among its fiscal goals, the government pledges to develop a national strategy for fiscal sustainability from 2025 to 2030, including deficit reduction targets, capped expenditure shares, and quarterly reporting on performance indicators. The government also promises to strengthen the institutional role of the Fiscal Council and increase public consultation before major fiscal decisions, including input from the Chamber of Fiscal Consultants.

Although the document avoids concrete figures in many areas, ministers have suggested that the dividend tax could rise from 10% to 16%, and excise duties may increase by approximately 10%. However, these figures are not confirmed in the published strategy.

Reaction to the strategy has been mixed.

Eugen Rădulescu, advisor to the governor of the National Bank of Romania (BNR), described it as “the best in the past 35 years”, according to Bursa. He said the reforms could avoid an increase in the VAT standard rate and would not significantly raise inflation, aside from energy market liberalisation effects.

However, Rădulescu warned of strong resistance to implementation, especially from groups facing reduced privileges, such as those with special pensions. He also noted that even the BNR might oppose certain measures, such as a proposed tax on banks’ “excessive” profits.

He welcomed proposals to simplify the VAT system, particularly the elimination of a second reduced rate, keeping only a 9% rate for food, medicine, and firewood. He also supported raising the dividend tax, citing reduced fiscal distortions, and endorsed plans to cut central administration staff by 20%.

In contrast, Valeriu Ivan of the Centre for Analysis and Forecasting for Strategic Orientations criticised the document in Economedia, calling it fragmented and lacking internal coherence. He argued the strategy repackages existing commitments without offering new, substantive solutions to Romania’s structural fiscal and administrative challenges.