Reducing Romania’s budget deficit and regaining investors’ trust should become a „national project,” says Finance Minister Alexandru Nazare.
The statement for Bloomberg comes at a time when the Government is trying to regain control over fiscal policy, amid the largest deficit in the European Union and pressures from the markets.
Nazare states that the stakes are not only about correcting specific imbalances but fundamentally changing how the Romanian state manages public finances, so that budget discipline is maintained regardless of political cycles.
Finance Target: Yields below 6% and stabilizing the rating
The Minister says his objective is to reduce Romania's debt yields – a crucial barometer of investor confidence – below the 6% threshold for all maturities by the end of the year. In this context, he expresses confidence that rating agencies will maintain Romania's rating in the investment-grade category and may even improve the negative outlook.
"I believe that 2025 was the moment when all major parties became aware that maintaining the course is extremely beneficial for Romania," Nazare told Bloomberg, emphasizing that the Government's ambition should go beyond just avoiding a downgrade.
Bolojan and the coalition under pressure from fiscal reforms
To improve the fiscal situation, the governing coalition led by Prime Minister Ilie Bolojan must remain focused on reducing the deficit to 6.2% of GDP this year, after last year's adjustment was better than anticipated.
The coalition, consisting of four parties, has committed to keeping Romania on the path of European integration but faces difficulties in setting the pace of reforms, as noted by the American economic publication. Bolojan recently warned government partners not to block the measures taken, without ruling out the possibility of continuing governance even in the form of a minority cabinet.
Lessons from Greece: budget discipline and economic growth
Nazare, recalling the eurozone crisis over a decade ago triggered by fiscal slippages in Greece, says that experience provided clear lessons on the need for strict control of public spending combined with policies to stimulate economic growth.
The Government has not yet approved the budget for 2026, amid internal disputes regarding reductions in public administration – an additional test for the coalition's coherence.
Friday, Romania is evaluated again by Fitch
A key moment is scheduled for Friday when Fitch Ratings will review Romania's country rating. Currently, it is one notch above the "junk" category but with a negative outlook.
Although investors have acknowledged progress over the past year – yields on 10-year lei-denominated bonds have dropped by over 100 basis points – concerns persist about Romania's ability to maintain the pace of fiscal consolidation. Public debt has exceeded 60% of GDP, and Fitch analysts have previously emphasized that stabilizing it is essential for any rating improvement.
"Regardless of the type of government or political orientation, the issue of public debt remains. We must address not only the deficit but also the debt, together," said Nazare. "The closer we get to our high growth potential, the easier it becomes to address both issues," he added.
G.P.