The government would prepare hard measures to reduce the budget deficit. Higher VAT, increased taxes and administration cuts

The government led by Marcel Ciolacu approaches the moment when he will no longer be able to postpone the adoption of harsh economic measures, necessary to reduce the budget deficit.

The budget deficit raises problems for the government. Photo: Inquam Photos/Mălina Norocea

According to official sources quoted by PRO TV news, from June 2025, the government would have forced to apply harsh measures to reduce the budget deficit. The executive would implement unpopular plans, under the pressure of the European Commission and the internal tax reality.

Two major scenarios are taken into account: either a resigned government will introduce the measures, or the entire government team will be changed, possibly with the extension of the coalition by USR co -operation.

Among the measures analyzed are:

– VAT increase by at least 2%;

– increasing taxes, especially on work;

– massive cuts of budgetary expenses;

– restructuring in the public administration, with personnel reductions.

Moreover, the variant of an agreement with the International Monetary Fund (IMF) is not excluded, if the Government fails to reduce the deficit by 2% of GDP on its own.

The situation is aggravated by recent economic data: in the first two months of the year, Romania spent 30 billion lei more than received, reaching a deficit of 1.58% of GDP. At the same time, the country became the champion of inflation in the EU, along with Hungary and Poland, and the interest on loans risks growing again, putting pressure on the population.

Last year, Ciolacu “tattooed” his message on his arm “The VAT is not increased”as a sign of public commitment. Now, the economic reality seems to force him to violate his promise.