Romania Tightens its Belt: Bolojan Government Announces Austerity Measures
The Romanian government, led by Prime Minister Ilie Bolojan, is moving forward with a series of austerity measures aimed at stabilizing the national economy. These measures, announced in February 2026, include potential staff reductions and a re-evaluation of public sector salaries, signaling a significant shift in fiscal policy.
Personnel Reductions and Salary Adjustments
Premier Bolojan has indicated that government departments with bloated staffing levels will face personnel reductions. However, these cuts will be implemented based on clear criteria, avoiding across-the-board layoffs. The focus is on streamlining operations and improving efficiency.
Regarding the proposed 10% reduction in public sector salaries, Bolojan clarified that this figure represents a target for the overall wage bill, not a uniform cut across all sectors. Crucially, essential services – including healthcare, defense, law enforcement, education, and culture – are expected to be shielded from direct salary reductions.
Budget Realignment and Economic Reform
The government aims to finalize a “realistic” state budget by the complete of the following week, alongside the adoption of legislative packages focused on administrative reform and economic revitalization. Bolojan emphasized the need for a pragmatic budget following consultations with President Nicușor Dan and coalition leaders.
These reforms are not solely about cutting costs. Bolojan’s administration intends to foster a culture of accountability and efficiency within the public sector. A rigorous audit will be conducted across both central and local administrations to identify areas for improvement and potential savings.
The Weight of National Debt
Bolojan defended the austerity measures by highlighting the substantial burden of national debt. He pointed out that Romania currently spends approximately 10 billion euros annually on debt servicing – an amount equivalent to the cost of building an entire highway. In 2025, the country’s interest payments totaled around 12 billion euros, representing 3.4% of its GDP.
Impact on Local Administrations
Local authorities with excessive staffing levels will also be required to implement reductions in personnel or expenditures. Bolojan stressed the importance of responsible spending at the local level, arguing that increasing taxes simply to cover salaries is unsustainable. Currently, the central government provides funding for approximately 25% of local government employee salaries.
Protecting Key Sectors
The government has signaled its commitment to protecting vital public services. Income for medical personnel in hospitals and ambulance services will not be reduced by 10%. This decision aims to prevent demotivation and stem the outflow of skilled professionals from the healthcare system.
Challenges and Delays
The implementation of these measures is not without its challenges. Bolojan acknowledged that the pace of reform is influenced by the need for consensus within the four-party governing coalition. Delays in rulings from the Constitutional Court (CCR) regarding special pensions for magistrates could jeopardize 231 million euros in European Union funding through the National Recovery and Resilience Plan (PNRR).
FAQ
Q: Which sectors will be most affected by the austerity measures?
A: Departments with demonstrably oversized staffing levels are likely to witness the most significant personnel reductions.
Q: Will healthcare workers experience salary cuts?
A: No, the government has specifically stated that the incomes of medical personnel will be protected.
Q: What is the government’s overall goal with these measures?
A: The primary goal is to stabilize the Romanian economy by reducing the national debt and improving the efficiency of public spending.
Q: How will local administrations be impacted?
A: Local governments will need to reduce personnel or expenditures, and funding from the central government will be tied to local tax revenue collection.
Did you know? Romania’s annual debt servicing costs are equivalent to the price of building a major highway.
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