Romanian President Nicusor Dan indicated on Tuesday that he might nominate a prime minister later this week, depending on pro-European parties reaching consensus on such major measures to cut the European Union’s biggest budget deficit and prevent a possible credit rating downgrade.
Dan, a centrist who won May’s divisive presidential election amid rising far-right influence, faces pressure to help form a ruling majority capable of passing deficit-cutting reforms by the end of June. Failure to do so could result in Romania losing its investment-grade rating.
Although the European Commission, IMF, and credit agencies insist that tax increases particularly to value-added tax or Romania’s flat 10% income tax are essential, Dan and the four pro-EU parties remain reluctant. Instead, they prefer reducing state expenditures and restructuring public institutions.
“There is a hierarchy of priorities cutting unnecessary state spending comes first, then merging institutions, rescheduling investments to 2026, and lastly, potential tax hikes,” Dan said during a visit to Moldova. “I hope we resort to taxes as little as possible.”
Despite identifying 60 to 80 possible measures, the parties have yet to reach consensus. Meanwhile, two sources told Reuters that credit rating agencies warned in May that Romania could face a downgrade unless credible reforms, including tax hikes, are implemented. The next review is due in August.
Claudiu Nasui, a member of the Save Romania Union and a vocal advocate for spending cuts, claims he has pinpointed 34 billion lei ($7.73 billion) in potential savings for the second half of 2025 without impacting healthcare, education, or defense. However, many of the proposed cuts are politically sensitive and may face resistance.
“Any deficit-cutting measure will be unpopular,” Nasui said. “But avoiding them harms the poorest most.”
