The former president of Romania, Traian Băsescu, explained what, in his opinion, is the biggest problem that the country currently has, noting that from a technical point of view, he does not see how it could be solved.
Traian Băsescu said what is Romania's biggest problem. Mediafax photo
“Interest on loans is growing at an impressive speed. So, this year, in 2025, we paid about 11 billion euros in interest. And the outlook is for growth, given the high interest rates at which the loan was made“, said Traian Băsescu.
“This can create a major difficulty at some point, because, I'll give you an example, in the next financial year of the European Union, the financial year 2028-2034, we have about 60 billion. If we pay 10-11 billion every month (no per year, not per month) in interest, we are basically paying the 60 billion euros from the European Union in interest. It's almost hard to imagine how we will manage“, Traian Băsescu also claimed to Digi24.
Traian Băsescu claims that this growth could only be stopped with a zero budget deficit, but Romania ended 2025 with a deficit of 6.4%.
“Technically, I don't really see a solution here. The problem is to fight to go from the situation you are in to a zero budget deficit in the shortest possible time. So you stop increasing your debt when you reach zero budget deficit. As long as you have a deficit, even the famous 3%, that means you are increasing your debt. You increase your debt, and the interest you pay increases. Or if the debt is rolling, the interest is not rolling, it's paid annually, it's paid accurately, and the risk of being declared in default comes from not paying the interest, mainly because that's what it is. We will have to borrow not only for the debt, but we also borrow money to pay the interest“, explained the former president.
At what interest rates does the state borrow the money
In the fall of last year, the Ministry of Finance announced that, for the first time in 2025, the cost of financing 10-year state loans in lei fell below the threshold of 7% per year. On other, shorter maturities, the Government borrowed below 7% several times in 2025.
In 2026, the state has already made the first loans with decreasing interest rates.
On Thursday, January 8, the state borrowed 1.99 billion lei from the domestic market, as part of the first issues of state securities this year, the result of the auctions being a positive one: the state had significant demand, above the initial value in the prospectus, especially for long-term bonds, and the loans were made at decreasing interest rates.
On Monday, January 12, the Ministry of Finance attracted 1.2 billion lei, also at lower interest rates, with government bond offerings enjoying large sums subscribed by investors, mainly banks.
As part of the first domestic issues of sovereign bonds, the Ministry borrowed 986.5 million lei through a 6-year bond issue (maturity September 2032), at an interest rate of 6.62% per annum, down 50 basis points (0.5%) compared to the last auction for this maturity (September 2032), from October 2025
Later, on Monday, in the second round of bond issues this year, Finances attracted another 1.2 billion lei through:
- 12-year bonds (maturity in February 2038) – 500 million lei loan at an annual interest rate of 6.64%, 33 basis points (0.33%) below the interest rate from a similar loan in November;
- 4.5-year bonds (maturity in July 2030) – loan of 700 million lei, at an annual interest rate of 6.43%, 0.47% cheaper than in November. The offers submitted by investors were 2.28 billion lei, the highest amount subscribed to an issue on the primary bond market since March 2025.
The need for financing could decrease only from 2027
The Ministry of Finance specified that Romania's gross financing needs are estimated to decrease only from 2027, as the budget deficit and the amounts reimbursed to the public debt service account will be reduced, according to the 2025-2027 public debt management strategy. According to the government document, Romania will have some of the biggest financing needs in history in the next 2 years: 288 billion lei in 2026 (record) and 244 billion lei in 2027.
Part of the gross financing requirement of 2026 has already been moved to 2025 as pre-financing, with an indicative target of 275-285 billion lei for the year 2026 at a budget deficit estimated at 133.9 billion lei (approx. 6% of an estimated GDP of 2,036 billion lei) and a need for repaying the maturing debt of approx. 154.3 billion lei.
