Romania’s Prime Minister Florin Cîțu announced that the Convergence Programme for 2021-2024 has been approved by the government at a cabinet meeting on Wednesday (5 May).
According to media reports, however, the programme offers little that is new. It is reportedly largely based on previous documents issued by the government, such as the fiscal-budgetary strategy and the governing programme, updated with the most recent macroeconomic data, though it also stresses the need to reform the public pension system.
In order to reduce Romania’s huge budget deficit, the government plans to cut expenditure from 42.3% of GDP in 2020 to 37.2% of GDP. This large cut could be in peril if the pension legislation is not changed.
The government postponed a large increase in public pensions last year, but it is still on the cards for 2023. The executive considers the proposed rise is unsustainable and will lead to a public debt increase, and therefore says it will continue discussions on changes to the pension law, a reform it wants to also support from the national recovery and resilience plan.
(Bogdan Neagu | EURACTIV.ro)