The technical working group formed by Romania’s four parties negotiating the formation of a governing coalition is drafting a series of cost-cutting measures aimed at reducing public expenditure, Profit.ro reported. However, no estimate of the total size of these reductions is currently available. 

The measures are part of efforts to meet a fiscal consolidation target of RON 35 billion (EUR 7 billion), equivalent to nearly 2% of GDP, through spending cuts and increased revenues.

The proposed cuts reportedly include limiting bonuses, revising eligibility for allowances, and reducing personnel expenditures in both central and local administrations. No estimate has yet been provided for the total savings that could result from the proposed measures.

Among the measures under review is the reduction or capping of the bonus for harmful conditions currently received by certain categories of employees. Fixed payments of either RON 500 (EUR 103) or RON 1,000 (EUR 206) are being considered. 

Similarly, incentives for employees working with European Union funds may be restricted to 10–20% of eligible staff based on performance criteria rather than the current blanket 50% salary bonus. A proposal advanced by the Social Democratic Party (PSD) would limit EU fund bonuses to five people per institution and remove the bonus altogether for staff requesting deadline extensions on project implementation.

The elimination of the classified information bonus - now between 15% and 25% - is also under discussion. The government is considering reducing the cumulative bonus cap from 30% per institution to a per-person limit of 20–30%, with exceptions under review for health and public safety sectors.

Other proposed measures include reducing the gross salary ceiling for receiving food allowances and holiday vouchers from RON 8,000 (EUR 1,650) to RON 6,000 (EUR 1,240) and restricting holiday voucher use to off-season periods and families with at least one child. Delegation allowances - totaling RON 900 million (EUR 186 million) annually - may be eliminated.

State-owned companies and public authorities would suspend 13th salary payments for two years, while Christmas and Easter bonuses would be capped at RON 300 (EUR 62). Professional training would be conducted exclusively online or on-premises, ending off-site sessions.

Reductions in the workforce are also being proposed: a 10% staff cut across public institutions and up to 20% in local administrations, based on population size. Additionally, budget cuts of 5% per spending officer are under consideration, alongside restrictions on combining early retirement pensions with state salaries.

The working group is expected to finalise recommendations in the coming period as the coalition parties continue to negotiate the structure and priorities of the next government.

iulian@romania-insider.com

(Photo source: Alexandru Marinescu/Dreamstime.com)