Published by Global Banking & Finance Review®
Posted on July 7, 2025
2 min readLast updated: January 23, 2026
Add as preferred source on GoogleRomania's government faces a no-confidence vote over tax hikes intended to reduce the deficit and avoid a ratings downgrade amid public protests.
BUCHAREST (Reuters) -Romania's two-week-old broad coalition government is set to face a no-confidence vote as it seeks to speed through planned tax hikes that have triggered street protests even though they are needed to avert a ratings downgrade to below investment grade.
Prime Minister Ilie Bolojan sought on Monday to fast-track parliamentary approval of the hikes from August in a procedure that exposes the government to a no-confidence vote.
As part of the process, the opposition hard-right Alliance for Uniting Romanians, or AUR, Romania's second-largest party, has three days to file a no-confidence motion, which it has already said it will seek.
The motion would only pass if lawmakers from the four pro-European parties that form the government and have so far supported the tax hikes side with the opposition.
"My appeal to colleagues in the opposition is this: take part in improving decisions, not in blocking them," Bolojan told lawmakers.
"The appeal to all Romanians is ... that we are aware these measures will be felt in the day-to-day life of a very large number of citizens. We are working to shorten as much as possible the difficult period Romania will face."
Romania ran four election campaigns last year, including a divisive presidential ballot that was cancelled and re-run this May. It had the highest budget deficit - 9.3% of economic output - in the European Union.
The tax hikes, which were made public last week, have been criticised by employers and unionists alike and thousands of public sector workers have staged protests.
The government will raise value added tax, excise duties and increase taxes including on dividends and banks' turnover. The impact is expected to be 9.5 billion lei ($2.21 billion) in 2025 and 35 billion lei ($8.14 billion) in 2026.
An opinion survey released on Monday by pollster INSCOP Research showed the AUR would win 40% of votes in an election, whereas the ruling Social Democrats, currently the largest party in parliament, would get 13.7%.
(Reporting by Luiza Ilie; editing by Barbara Lewis)
The Romanian government is facing a no-confidence vote due to planned tax hikes aimed at lowering the budget deficit, which have sparked street protests.
The government plans to raise value added tax, excise duties, and increase taxes on dividends and banks' turnover, with an expected impact of 9.5 billion lei in 2025.
The proposed tax hikes have been criticized by employers and unionists, leading to thousands of public sector workers staging protests.
Romania had the highest budget deficit in the EU at 9.3% of economic output, indicating significant financial challenges.
The opposition hard-right Alliance for Uniting Romanians (AUR) has announced plans to file a no-confidence motion, which would require support from lawmakers in the ruling coalition to pass.
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