ASSESSMENTS

Romania's Divided Government Struggles To Reduce Its Fiscal Deficit

Jul 17, 2023 | 17:11 GMT

The Romanian flag is waved above a teachers' protest in Bucharest, Romania, on June 9, 2023.
A Romanian flag waves in the sky as teachers march in a protest on the streets of Bucharest on June 9, 2023.

(MIHAI BARBU/AFP via Getty Images)

An ideologically divided Romanian coalition government is struggling to come up with measures to reduce the country's fiscal deficit, which will open the door to additional social unrest and potential economic risks. On July 11, representatives from the European Commission arrived in Romania to discuss measures to reduce the country's fiscal deficit. The visit came only days after Romanian newspapers reported on June 30 that the European Commission had sent a letter to the Romanian government asking the country to reduce its fiscal deficit, which reached 2.32% of GDP between January and May 2023, compared with 1.48% during the same period of 2022. This EU pressure on the Romanian government is happening less than a month after the Romanian Parliament appointed center-left Social Democratic Party (PSD) leader Marcel Ciolacu as the country's new prime minister on June 15. Ciolacu succeeded Nicolae Ciuca, from the center-right National Liberal Party (PNL), who...

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