BUCHAREST, Feb 25 (Reuters) - Romania's broad coalition government approved a decree on Tuesday that will cut jobs and state spending across public administration as it seeks to lower the largest
Romania Approves Public Administration Job Cuts to Curb Deficit
Scope and Timeline of Romania’s Public Administration Cuts
BUCHAREST, Feb 25 (Reuters) - Romania's broad coalition government approved a decree on Tuesday that will cut jobs and state spending across public administration as it seeks to lower the largest budget deficit in the European Union.
Town Halls and Local Impact
Townhalls will cut 12,794 jobs by 2027 at the latest, while across all public administration the measures will eliminate roughly 10% of effectively occupied jobs.
Savings and Fiscal Targets
The cuts will save 1.6 billion lei ($371.10 million) in 2026 and 3 billion lei from 2027, the regional development minister told reporters late on Tuesday.
Mayors’ Flexibility on Job Cuts
Mayors can choose to postpone cutting jobs until 2027 as long as they reduce wage costs by 10% this year. Job and spending cuts already made by the central government last year will count in the overall reductions, the minister said.
Exemptions and Conditions
State hospitals, the military and national security jobs will be exempt pending conditions.
Political Context and Budget Outlook
Since taking power last June, the coalition government has survived six no-confidence votes, mostly over tax hikes and spending cuts aimed at reducing the largest budget deficit in the EU and preserving Romania's investment-grade debt rating.
But the four parties in the coalition have struggled to agree on job cuts and the budget for 2026 has yet to be approved. Prime Minister Ilie Bolojan said on Tuesday the cabinet will send a budget to parliament next week.
The government must continue cutting the deficit from over 9% of GDP in 2024 to this year's target of 6.2%, narrowing it to the EU's 3% ceiling by the end of the decade.
Support Schemes and Incentives
Also on Tuesday the government approved a series of support schemes, incentives, state aid and tax exemptions to support economic growth with a total impact of roughly 5 billion euros ($5.90 billion) until 2032. The economy slipped into technical recession at the end of last year.
Exchange Rates Used
($1 = 4.3115 lei)
($1 = 0.8475 euros)
(Reporting by Luiza Ilie; Editing by Sharon Singleton)
