Daniel Dăianu, president of Romania’s Fiscal Council, warned that reducing the country’s high budget deficit cannot be achieved solely through expenditure cuts, insisting that increased tax revenues and higher tax rates are unavoidable. Speaking in Parliament on May 27, he described the deficit as "gangrene" for the Romanian economy and said relying on spending cuts alone is an illusion.

“Those who support the thesis that the deficit correction can only be done on the expenditure side are chasing a chimera. Such a thing is not possible,” Dăianu stated, as quoted by News.ro, referencing analyses conducted by the Fiscal Council and his own judgment. 

“I believe that we cannot avoid increasing the state's fiscal revenues through some increases in taxes and duties. These are personal opinions,” he added.

Romania recorded a 2.95% deficit-to-GDP ratio in the first four months of 2025, with full-year projections expected to reach 7% or higher. Dăianu argued that the structural imbalance in Romania’s public finances cannot be resolved without tax reform.

 “A substantial increase in tax revenues, from much better collection, is not possible,” he said, adding that only new tax measures can close the fiscal gap.

He also rejected the idea, floated by some political leaders, that savings of RON 30 billion could be made through spending cuts alone. 

“I don’t believe that,” he said. “If you look at the structure of the public budget, you will notice that by far, the bulk is held by salaries and pensions. First of all, you can’t cut salaries and pensions as you want.”

While Dăianu acknowledged that there may be some room to reduce expenditures on goods and services, he stressed that such cuts would be insufficient. 

“Romanian society has been living on the budget far beyond its means,” he said, cautioning that the fiscal burden does not fall solely on civil servants but also on essential public sector workers like teachers and doctors.

iulian@romania-insider.com

(Photo source: Inquam Photos/George Calin)