Independent presidential candidate Nicușor Dan, the current mayor of Bucharest, has stated that Romania’s fiscal consolidation must focus primarily on reducing public expenditure rather than increasing the tax burden, though he did not rule out future tax hikes if necessary.
His remarks came during an economic debate broadcast on RomaniaTV, where the country’s growing budget deficit was a key topic, according to Economica.net.
“There are four major lines of deficit correction – two on the revenue side, two on the expenditure side,” Dan said. “On revenues, we’re talking about large-scale tax evasion, which the World Bank advised us to address, but we’ve done nothing. Then, there are European funds, which are delayed due to bureaucracy. On expenditures, limiting state spending and improving the efficiency of municipal companies are key.”
Romania ended 2024 with a public deficit exceeding 9% of GDP, prompting urgent calls for fiscal reform. Dan stressed that the 2–3% deficit target recommended by the EU is unrealistic for 2025 but said a 7% target should be achievable.
“We must regain the trust of the financial market,” he said, warning that failure to act decisively would invite external intervention. “If we don’t manage this ourselves, the IMF will come and cut for us.”
Drawing on his experience as mayor of Bucharest, Dan cited his decision to cut spending on park maintenance and security to address a local budget shortfall, noting that similar measures would be necessary nationally.
“There will be some cuts, some of them painful, but they are absolutely mandatory to avoid tax increases that would harm economic activity,” he added.
Addressing the issue of wage policy, Nicușor Dan cautioned against increasing the minimum wage before restoring fiscal stability. “No economy can sustain a 9% deficit. Giving a minimum wage higher than what the economy can afford is state interventionism, which distorts the system,” he said.
While emphasising spending rationalisation, Dan acknowledged that tax hikes may be considered in the future if spending cuts prove insufficient. “Now the discussion is whether we survive economically or not,” he concluded.
iulian@romania-insider.com
(Photo source: Facebook/Nicusor Dan)
