Romania’s budget deficit ballooned last year its highest levels of recent times and is likely to sit at 8.6% when final figures are released, Romania’s Finance Minister Barna Tanczos said.
The ministry will release the figures for 2024 in the coming days, the minister said, predicting a still high deficit of 7% for 2025.
Romania’s deficit of 6.6% was the third highest in the European Union in 2023, after Hungary (6.7%) and Italy (7.4%), the last available annual figure.
To slash the deficit, Romania’s new government has established an efficiency department along the lines of Donald Trump’s in the US, which is headed by billionaire Elon Musk.
Liberal Party chairman Ilie Bolojan is ‘the Elon Musk’ behind the new department, he said.
“2024 was a difficult year for Romania… It was an election year, with a lot of elections, with an electoral campaign, ..pensions were recalculated, salaries were increased in several areas and unprecedented investments,”Mr. Tanczos said.
“It is a challenge ….but at the same time it must also be the year in which we start to create that lean state that does not collect taxes to become obese, and to hire even more staff, and to offer the same services with a larger number of employees, with higher costs,” he told Antena 3 late Thursday.
Asked how long the freeze on pensions and salaries would last, Tanczos Barna said: “As soon as we have sufficient resources, we will recover these postponed indexations, because that is normal and that is right.”
“I am glad that the Government, through the leadership of Prime Minister Marcel Ciolacu and Mr. Bolojan, have set up this department of governmental efficiency. Yes, we were inspired by Doland Trump,” the finance minister said.
“Mr Bolojan comes with an extraordinary determination, he comes with the experience from Bihor County, where he has already performed similarly at the county level,” he added.
On Dec. 31, Prime Minister Marcel Ciolacu announced new economic ‘ordinance’ measures to address governmental budget deficit issues.
The new plan approved a hike in taxes, and capped a series of subsidies, as well as public sector wages and pensions, which were supposed to be indexed, starting from January.
The amendments to the economic outlook of the country are temporary, and will be changed subject to improvement of economic conditions, Mr. Ciolacu said.
The emergency decree raises taxes on corporate dividends from 8% to 10%, and lowers a tax threshold for small companies, which in Romania are defined as companies with three staff or less and revenues not exceeding €500,000 annually.
On November 13, President-elect Donald Trump announced on Tuesday that Elon Musk and Vivek Ramaswamy would lead a new “Department of Government Efficiency” in his second administration.
