Romania’s new coalition government, led by Prime Minister Marcel Ciolacu, has approved a new economic plan for the upcoming 2025 fiscal year. The plan aims to address the country’s budget deficit issues by implementing a series of measures, including tax hikes and subsidy caps. These changes are expected to save up to 130 billion Romanian Lei by the end of the year, with the goal of reducing the deficit to 7% of GDP by the end of 2025 and further down to 2.5% over a seven-year period. Despite facing protests from affected sectors, the government is committed to implementing these changes to stabilize the economy.
One key aspect of the economic plan is the increase in taxes, including raising corporate dividends tax from 8% to 10% and lowering the tax threshold for small companies. Additionally, tax exemptions and incentives for sectors such as IT and construction have been eliminated, and a property tax on corporation-owned buildings has been reintroduced. The measures have sparked protests in Bucharest, with some employees expressing their dissatisfaction with the perceived pay cuts. However, the government has emphasized that these changes are necessary to address the country’s deficit crisis and ensure long-term financial stability.
Finance Minister Barna Tanczos has highlighted the importance of these measures in reducing Romania’s deficit, which currently stands at 8.5% of the country’s GDP. The government aims to gradually reduce the deficit over the next few years and has outlined incremental plans to achieve this goal. Tanczos also mentioned the establishment of a government efficiency department, tasked with reducing state spending by at least 1% of GDP. The government’s focus is on reform and development, with Ciolacu stressing the importance of efficiency over popularity in his leadership.
While the new economic measures have been met with resistance from some sectors, the government is committed to addressing the deficit crisis and stabilizing the economy. Ciolacu has reassured the public that the changes are not intended to replicate the austerity policies of the past but rather to ensure sustainable economic growth. He has promised measures to support low-wage earners and families, including potential tax reductions and stimulus checks for those with small pensions. The government is determined to navigate the economic challenges facing the country and set a path for future growth and development.
Despite the challenges and protests surrounding the new economic measures, the Romanian government remains steadfast in its commitment to addressing the budget deficit and implementing reforms for long-term financial stability. The measures outlined in the economic plan are aimed at reducing the deficit over the next few years and promoting economic growth. While facing criticism and resistance from some sectors, the government remains focused on efficiency and development. Ciolacu’s leadership emphasizes the need for reform and innovation to ensure Romania’s economic prosperity in the years to come.
