Romania's Public Debt Surpasses 60% of GDP
Romania's public debt has crossed 60% of GDP for the first time. It reached 60.1% at the end of the first quarter of 2026, according to Eurostat data. Acting Finance Minister Alexandru Nazare confirmed the need for action during a government meeting on August 19. The country has been under an Excessive Deficit Procedure since 2020. This procedure imposes limits on budget commitments.
The Ministry of Finance estimates that public debt will rise to 61.8% of GDP by the end of 2026. It could reach 63.3% by the end of 2027. Nazare explained that going over the 60% threshold triggers new spending control rules. This means the government cannot approve new budget commitments that increase total personnel or social assistance expenses while debt remains above this level. Any budget initiatives must follow the fiscal framework and be carefully assessed for their impact.
On the same day, the European Commission asked Romania for more details about the financing of a proposed new Wage Law for the budgetary sector. The government plans to raise the payroll envelope by RON 12 billion, up from an initial RON 8 billion increase. The Commission's request shows concerns about Romania's worsening economic outlook and the pressure on public resources. The new Wage Law aims to create a clear and fair wage system, replacing a complicated bonus structure.
Related coverage: Romania Posts Highest EU Inflation at 8.2% in July 2026.
The rising public debt and potential changes to the wage law could affect Romania's fiscal stability. This may impact government bonds and investor confidence. Higher debt levels might lead to increased borrowing costs. Investors will closely watch the government's response to the European Commission's request for clarification on the Wage Law financing. This response will be crucial for future budget planning.
Based on reporting by: romania-insider.com