Close to the economic parastatus? Romania enters a straight line with PNRR: Without a stable government, we risk losing billions of euros
Romania is approaching the most difficult stage in the implementation of the National Recovery and Resilience Plan (PNRR), at a time when it still does not have a stable government, and some of the most important reforms assumed before the European Commission are far from being completed. Economists consulted by “Adevărul” warn that political and legislative delays can cost Romania billions of euros, money on which investments in infrastructure, health, education and public administration depend.
Political and legislative delays can cost Romania billions of euros. Archive photo
The National Recovery and Resilience Plan has a total value of approximately 28.5 billion euros, of which approximately 14.2 billion euros represent non-refundable grants and approximately 14.3 billion euros are loans.
Some of the funds have already been attracted, but the most difficult tranches are those that depend on the fulfillment of milestones and reforms considered politically sensitive. Among them are the fiscal-budgetary reform and the unitary wage reform, measures that involve important changes in the way the state manages public spending.
The deadline is August 31, 2026. After this date, reforms and investments that are not completed can no longer be settled through the European mechanism.
Bogdan Glăvan: “There is a real risk that certain objectives will not be met on time”
Economics university professor Bogdan Glăvan told “Adevărul” that the situation differs between the investment projects and the reforms assumed by Romania.
“On the investment side, we are dealing with a physical reality. There you can assess quite clearly which objectives can be completed and which objectives cannot be completed on time. There are projects that are being worked on intensively just to be finished before the deadlines expire.
The more complicated issue is in the area of reforms. Here we are no longer talking about technical or physical constraints, but about political will. It's not like a hospital or a highway where you have to finish work that's already started. The reforms presuppose the adoption of some normative acts and the assumption of some political decisions“, the economist declared for “Adevărul”.
He added that through a normal legislative process it is very difficult for all the remaining milestones to be met in such a short period of time. “An example is the law on unitary wages, where there are complaints from many directions and where I don't see how a consensus could be quickly reached in Parliament.
Furthermore, we are at a time when we don't even have a government with a clear and stable majority yet. The risks are therefore significant. We are talking about very large sums of money, including hundreds of millions of euros associated with important milestones. For this reason, there is a real risk that certain objectives will not be met on time“, states Glăvan.
The time left is very short
Asked if the deadline can still be met in full, the economist believes that this would require exceptional measures and quick political decisions.
“I think this would only be possible if exceptional procedures are used and very quick political acceptance of some measures. In the conditions of an ordinary legislative process, the time left is very short.
We must take into account that the projects must not only be drafted, but also approved, and the Parliament also enters the parliamentary vacation period. In addition, the political situation is also not completely clarified at this time.
For these reasons, I see serious difficulties in fully meeting all the assumed deadlines“, he says.
Adrian Negrescu: A quick renegotiation of the terms is needed
Analyst Adrian Negrescu believes that without a quick renegotiation with Brussels, Romania risks losing an important part of the available funds.
“Without a clear renegotiation by the future government, whether it will be Tomac's or another prime minister's, the chances of attracting the 10 billion euros by August are running out day by day. And the best example is the money allocated to the budgetary wage reform. As the wage law has little chance of being adopted, the more than 700 million euros would be lost.
And that is why it is important that the new prime minister goes to Brussels and moves this money to other levels, especially in the area of infrastructure – the construction of highways – the only area where we are making real progress.
Otherwise, if we go at the current pace, the PNRR risks becoming what we anticipated a few years ago – the National Plan for Failed Reforms. So far, we haven't taken even 30% of the money initially allocated and there are little chances of reaching 15 billion euros with the absorption”says Negrescu.
Pressure from rating agencies as well
Beyond European funds, economists point out that Romania is also closely monitored by international rating agencies.
“The situation is delicate because an important part of the state's investments and development plans are based on these European funds.
At the same time, we also need to look at the broader financial context. In the coming period we will have important evaluations from international rating agencies. These institutions closely monitor economic and political developments and may decide to change the outlook associated with the country rating.
Economic expert Gabriel Biriș warns: An independent prime minister will be “eaten on bread” by political ministers. Romania risks a total blockade
This is one of the major risks. If Romania continues to send signals of instability and lack of predictability, the pressure on the rating may increase. And a deterioration of the rating would mean higher financing costs for the state and the economy as a whole”warns Bogdan Glăvan.
However, the economist believes that there are also elements that provide a certain stability.
“I hope that things will settle down. There are also positive elements to be mentioned. For example, the budget execution is currently in line with what was estimated and planned. This is an important thing, because in the past there have been situations where the reality deviated significantly from the assumed plans.
Of course, there are also problems. We are yet to see dramatic improvements in revenue collection to the budget, and this remains a challenge,” Glavan declared for “Adevărul”.
On the other hand, he says, the disappearance of the governing majority and political deadlocks represent negative elements.
“From what I have observed, governmental instability is one of the factors taken into account by the rating agencies when evaluating Romania.
We will definitely have a new government at some point. I don't think we are headed for a very long period of instability or snap elections. There are constitutional mechanisms that limit this situation, and I believe that the political solution will appear before reaching an extreme scenario”explained the economics professor.
What happens if Romania loses money from PNRR
The harshest assessment comes from Adrian Negrescu, who claims that the impact on public investments could be major.
“If the failure of the PNRR is confirmed, more than 90% of the state's current investments, from highways to schools, hospitals, etc. will be suspended under the conditions that European money represents more than 80% of the funding. The state does not have and will not have where to support these projects, which is why it will put the lock on the door.
And the impact will be felt widely across the economy. Beyond the directly affected companies, including the local foreign exchange market will suffer especially since the current currency liquidity is not in the best shape.
The failure of the PNRR will be like a kind of candy on the cage at an economic parastas where “Eternal Remembrance” will be sung, of course, by those from the IMF.”, said Adrian Negrescu.
While assessments of the magnitude of the effects differ, both economists agree on one key point: the time left until the deadline is extremely short, and the future government's ability to quickly enact outstanding reforms will decide how much of the European money can be saved.
European Commission: Romania has “satisfactorily” complied with its commitments regarding reforms and investments
Delayed reforms can block billions of euros and increase pressure on the budget
Romania does not risk suddenly losing the entire PNRR, but it risks something less visible and much more important: the gradual loss of billions of euros that depend on reforms and investments not completed on time. The National Recovery and Resilience Plan has a total value of approximately 28.5 billion euros, of which approximately 14.2 billion are non-refundable grants and approximately 14.3 billion are loans.
So far, some of the funds have already been attracted, but the real pressure is on the upcoming tranches. Accessing them depends on the fulfillment of milestones and strictly conditional reforms. In their absence, the amounts are not formally lost from the start, but they can be suspended, postponed or reduced, which in practice equates to their loss from the current financing of the economy. Cumulatively, tens of billions of euros are at stake until the end of the program.
The major risk is not only administrative, but structural. Among the most sensitive components is the fiscal-budgetary reform, including the reform of unitary wages in the public sector, a politically difficult subject, with a direct impact on the state's permanent expenses. This type of reform is critical not only to meeting milestones, but also to long-term fiscal credibility. Delays in this area have a ripple effect on the entire program.
Every legislative delay, every political deadlock, and every unfinished reform means money pushed into the future or lost from available funding. Depending on the degree of implementation, Romania may end up in a situation where a significant part of the remaining funds can no longer be fully accessed.
The deadline is August 31, 2026, by which time all reforms and investments must be completed and the last payment request must be submitted. After this date, the PNRR mechanism closes, and what is not implemented on time is no longer settled.
