The Council of the European Union has recommended that Romania adhere to a maximum net expenditure growth path through 2030 to correct its excessive deficit, with annual limits ranging from 2.6% to 4.6%, and implement structural reforms to address macroeconomic imbalances. The recommendation, adopted on 22 June 2026, sets cumulative net expenditure growth from the 2024 base year at 2.8% in 2025, rising to 24.9% by 2030. The corrective path supersedes an earlier recommendation of 21 January 2025, but the reforms and investments underpinning the seven-year adjustment period extension remain in force.
The recommendation follows the Commission's conclusion on 3 June 2026 that Romania continues to experience excessive macroeconomic imbalances, including fiscal and current account deficits, cost competitiveness deterioration, and a significant bank-sovereign nexus. Romania's general government deficit fell from 9.3% of GDP in 2024 to 7.9% in 2025, and is projected at 6.2% in 2026 and 5.8% in 2027. Public debt rose from 54.8% of GDP in 2024 to 59.3% in 2025, projected at 61.6% in 2026 and 63.4% in 2027. The excessive deficit procedure is held in abeyance based on the Commission's effective action assessment of 3 June 2026.
Policy orientations and trade-offs The Council's recommendation imposes strict fiscal discipline on Romania, requiring net expenditure growth to be capped at 2.8% in 2025, 2.6% in 2026, 4.6% in 2027, 4.4% in 2028, 4.2% in 2029, and 4.0% in 2030. This path aims to bring the deficit below the 3% of GDP reference value by 2030. The trade-off involves constraining public spending to achieve fiscal consolidation, which may limit public investment and social spending in the short term, but is intended to restore fiscal sustainability and reduce debt.
Impact on stakeholders Romanian national authorities face the challenge of implementing strict expenditure limits while pursuing structural reforms, including public sector remuneration reform (new law expected summer 2026), tax administration improvements to reduce the VAT compliance gap (currently 30%), property taxation reform with an IT system for automated assessment, and business financing reform. Taxpayers may benefit from improved fiscal sustainability and lower borrowing costs, but could face higher taxes or reduced public services as the government consolidates. The business sector may gain from a more stable macroeconomic environment and better tax administration, but could be affected by reduced public investment and potential tax increases. EU institutions, particularly the Commission, will monitor compliance, with the excessive deficit procedure held in abeyance pending effective action.
Institutional follow-up Romania is expected to implement the recommended reforms and investments, with the Commission assessing progress. The country must accelerate implementation of the Just Transition Fund, with resources due for disbursement by end of 2026, and rapidly deploy new investments from the cohesion policy mid-term review. The Council may revisit the recommendation if Romania deviates from the expenditure path or fails to implement reforms.