Bucharest, October 22, 2025 – by Constantin Radut – Having come to the head of the Romanian Government about half a year ago, Ilie Bolojan proclaimed himself the country’s savior. Frowning, with his eyes fixed on the numbers, absorbed by all kinds of rumors, the former mayor of the city of Oradea managed to bring the Romanian economy to the brink of recession. He “decreed”, on his own power, that the country was facing bankruptcy. As a result, fiscal measures and budget restrictions followed that reduced the margin of initiative of Romanian companies.
Until 2025, Romania’s economy was one of the most dynamic in the EU, alongside Poland. The governments of the last four years have spent a lot to recover the gaps in the road and railway infrastructure sectors, renew the energy structure and stimulate the deficit sectors, especially in the defense industry, the food industry, the production of agricultural goods. Since the budget revenues were not sufficient, the Ministry of Finance borrowed money from the domestic or foreign market. Against the background of a chronic trade balance, the budget deficit increased rapidly in 2023 and 2024, reaching about 9.3% of GDP, according to Eurostat.
Self-critical with himself, but with a big mouth in the public market, PM Bolojan decided to eliminate the large deficit for which the EC was criticizing us. Without taking into account that excessive deficits are or have been present in all economies that have based their development on increased investments, the government in Bucharest entered a vicious circle. He made a title of glory out of restricting investments and increasing taxation on individuals and SMEs.
Increasing the deficit is not a “sin” for the development of a national economy. On the contrary, there are many economists who have the opposite opinion. According to them, it is unjustified to scare the public with the dramatic consequences of an increase in the budget deficit. For a country like Romania, it is not true that, by temporarily increasing the deficit and debt, we will become another Greece, blamed for so long by the EU under pressure from the German government led by Angela Merkel. The economy needs support not only because of the threat from Russia, which forces us to drastically increase defense spending, but also because of the significant economic recession in EU countries, the stagnation in Germany being particularly painful for our companies, dependent on the German automotive industry, for example.
Poland, which has already gone through a cycle of excessive deficit 7-9 years ago, does not want to implement measures to restrict economic activity and social welfare. As a result, in Q2 2025, Poland’s public deficit was 8.5% of GDP (seasonally adjusted data), according to Eurostat. At the same time, Romania’s deficit was 8.7% of GDP. The difference is that Poland continues to implement investment and development policies, while Romania is acting with all the brakes on economic development and strangling domestic capital.
Tempering the restrictive policies of the Bucharest government and identifying levers to stimulate the growth of industry and agriculture would be much more beneficial for the country’s economy in the coming years.
Because once you enter the clutches of recession, it will be difficult to get out, much harder than from a large budget deficit.
