Romania Approves Major Public Sector Job Cuts to Reduce Budget Deficit
Bucharest, 25 February 2026 – Romania’s coalition government has approved a decree to reduce jobs and state spending across public administration in a bid to lower the country’s budget deficit, the largest in the European Union.
The measures will eliminate approximately 10% of currently occupied positions in public administration, with town halls expected to cut 12,794 jobs by 2027 at the latest. The reforms are projected to save 1.6 billion lei ($371 million) in 2026 and 3 billion lei from 2027 onward.
Local authorities may delay implementing the cuts until 2027 if they achieve a 10% reduction in wage costs this year. Job and spending reductions already enacted by the central government last year will be counted toward the overall target. Certain sectors, including state hospitals, the military, and national security, are exempt pending specific conditions.
Since taking office in June 2025, the coalition government has survived six no-confidence votes, largely over tax increases and spending cuts aimed at reducing the EU’s largest deficit and maintaining Romania’s investment-grade debt rating. The 2026 budget has yet to be approved, but the cabinet plans to submit it to parliament next week.
The government aims to cut the deficit from over 9% of GDP in 2024 to 6.2% in 2026, ultimately narrowing it to the EU ceiling of 3% by the end of the decade. In parallel, authorities approved support schemes, incentives, and tax exemptions valued at around 5 billion euros ($5.9 billion) through 2032 to stimulate economic growth, following a technical recession at the end of last year.
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