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Romanian Government Announces Austerity Measures Alongside Controversial Spending
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Romania’s government is enacting a series of austerity measures through a new emergency ordinance,dubbed the “Trenuleț Ordinance,” while simultaneously facing scrutiny over discretionary spending. The measures, designed to stabilize the economy until the 2026 budget is approved, include pension freezes and cuts to parliamentary funding, sparking debate about the government’s priorities.
On christmas Eve, Prime Minister Ilie Bolojan gifted his cabinet members with Babka muffins costing 59 lei each – a gesture that drew criticism when contrasted with the limited resources allocated to social programs. according to reports from Profit.ro and Gândul, the Babka cakes were sourced from a company in Oradea, a city were Bolojan previously served as mayor. This sparked public debate about the perceived disconnect between government frugality and spending on non-essential items.
“The cost of a single cake exceeds the daily allowance provided for vulnerable citizens through heating vouchers,” noted journalists at Gândul, highlighting the disparity. The government has allocated 50 lei in aid for vulnerable people in 2026, while the “Healthy Meal” program for students receives onyl 15 lei per student per day, set to increase to 16.5 lei in 2026. The student meal program, aimed at combating school dropout, has a total budget of 1.53 billion lei for 171 course days.
“Trenuleț Ordinance” Details: Freezes and Tax Adjustments
Adopted on Tuesday evening, the “Ordinance-train” aims to reduce expenses and regulate financial aspects until the 2026 budget is finalized. A key component of the ordinance is the freezing of pensions and allowances, including service pensions, for 2026. Though,pensions for offspring will be updated based on the average annual inflation rate.
Further cost-cutting measures include a 10% reduction in expenses for parliamentary offices and a similar reduction in subsidies allocated to political parties and national minorities.
Corporate Tax Changes and Minimum Wage Relief
The ordinance also outlines important changes to corporate and capital taxation. The minimum turnover tax (IMCA) will be gradually reduced from 1% to 0.5% in 2026 and eliminated entirely in 2027. Additionally, the supplementary tax on the oil and natural gas sectors (ICAS) and the construction tax will be repealed in 2027.
Micro-enterprises will benefit from a single tax rate of 1% starting in 2026,with adjustments to the framing ceiling and taxable base determination rules.
To provide relief to lower-income workers, the government proposes exempting the first 300 lei of gross minimum wage from tax and contributions between January 1 and June 30, 2026, and 200 lei between July 1 and December 31, 2026.This measure applies to full-time employees earning up to 4,300 lei in the first half of the year and 4,600 lei in the second.
