What is the main topic?

The main topic is Romania's seven-year plan to reduce its fiscal deficit to below 3% of GDP by 2030, approved by EU finance ministers.

Why is Romania's deficit plan important?

It aims to stabilize public debt, reassure investors, and ensure continued access to EU recovery funds.

What challenges does Romania face?

Romania faces high bond yields, a negative credit rating outlook, and political instability affecting investor confidence.

Editorial & Advertiser disclosure

Global Banking & Finance Review® is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Home > Finance > EU approves Romania's seven-year deficit reduction plan

Finance

EU approves Romania's seven-year deficit reduction plan

Published by Global Banking & Finance Review®

Posted on January 21, 2025

2 min read

Last updated: January 27, 2026

Graph illustrating Romania's seven-year deficit reduction plan approved by the EU - Global Banking & Finance Review — This image depicts the EU's approval of Romania's seven-year deficit reduction strategy, crucial for fiscal stability and investor confidence in the country's economy.

EU Endorses Romania's Seven-Year Deficit Reduction Plan

BUCHAREST (Reuters) - EU finance ministers approved Romania's deficit-cutting plan on Tuesday to bring its fiscal deficit below 3% of national output by 2030, a move Bucharest hopes will help reassure investors about its economic outlook and tame surging bond yields.

Romania has been under the EU's excessive deficit procedure since 2020, meaning it must present the European Commission with a multi-year plan to reduce the deficit back to below the bloc's ceiling of 3% of gross domestic product (GDP).

Bucharest submitted its seven-year deficit reduction plan to Brussels last October, saying it aimed to lower the fiscal shortfall from 7.0% in 2025 to 2.5% in 2031.

Finance Minister Barna Tanczos told Reuters this month the new coalition government was sticking to that plan.

The government said its 2025 budget plan will cut the deficit to 7% of economic output without hiking any major tax while keeping state investment high, despite analyst warnings that more measures are needed.

Fitch has cut Romania's credit rating outlook to negative and all three main ratings agencies have the country on their lowest investment-grade. Romania's 10-year yield has surged to 8.1% earlier this month, a two-year high.

"Romania's fiscal plan aims to stabilise public debt at a time (when) ... Romania continues to rank among the first in the EU for public investment levels," Tanczos said on Tuesday.

Fiscal consolidation is key to ensuring Romania continues to receive billions of EU recovery and development funds - over 70 billion euros by 2027 - which are underpinning infrastructure investment and economic growth.

Romania's budget deficit for 2024 is expected to hit 8.6% of economic output after heavy spending ahead of parliamentary and presidential elections late last year.

In a further test of investors' confidence, Romania was plunged into political turmoil when a far-right NATO critic won the first round of the presidential election on Nov. 24, prompting accusations of Russian interference - denied by Moscow - and ultimately leading to the annulment of the entire ballot.

(Reporting by Luiza Ilie and Gergely Szakacs; Editing by Gareth Jones)

EU approves Romania's seven-year deficit reduction plan

Quick Summary

EU Endorses Romania's Seven-Year Deficit Reduction Plan

Key Takeaways

Frequently Asked Questions about EU approves Romania's seven-year deficit reduction plan