Statements by Romanian Prime Minister Ilie Bolojan proposing a 10% cut to the total personnel budget across all ministries and similar contracting bodies triggered strong reactions from the Social Democratic Party (PSD) and public-sector trade unions on November 19, News reported. No final version of the draft law has yet been circulated.

The proposed 10% payroll reduction would come in addition to the wage freeze introduced in July, which fixed public-sector salaries and pensions at their November 2024 level through the end of 2026. With inflation projected to remain near double digits at the end of this year, the freeze translates into an estimated 10% real-terms income decline in 2025, with further erosion expected in 2026. Coalition tensions could increase if an additional 10% reduction is applied, although alternative staffing cuts remain possible.

It is unclear whether the proposed measure, expected to generate roughly 0.5% of GDP in savings, is required to meet the 6-6.5% of GDP deficit target for 2025. The European Commission, IMF, Fiscal Council and rating agencies have all assessed that the July reform package is sufficient to ensure fiscal consolidation toward the 2026 target, though further steps would still be needed thereafter.

“In the public administration reform package, this recommendation envelope was included, that all ministries should consider, for next year, a reduction in expenses compared to this year, up to 10% of the salary envelope,” Bolojan told ProTV on November 19. He said ministries could achieve the reduction through staff cuts, bonus reductions or other measures keeping wage expenditure “at a reasonable level”.

Bolojan stressed that no exceptions would be permitted and noted that the payroll cut could be achieved without lowering base wages, through hiring freezes, bonus elimination or reorganisation. He previously said the draft law would be endorsed this week and submitted to parliament next week.

UDMR president Kelemen Hunor confirmed that the proposal, drafted by Development Minister Cseke Attila, would apply to all public employees except those in local administration, which will be covered by a separate law also targeting a 10% payroll cut. The Ministry of Education at the local level would face a 4% adjustment, as a 6% reduction was already mandated in July.

PSD president Sorin Grindeanu rejected any cut in public-sector incomes. “As long as PSD is in government, salaries will increase, not decrease. We will not be part of any government that decreases salaries,” he said, according to News. He added that a 10% reduction would save around RON10bn (€2bn), an amount he argued could be secured through alternative measures.