Political turbulence is seen as a main factor that could affect Romania's two important targets, namely the fiscal-budgetary trajectory for 2026 and maximising the absorption of money from European funds, and the public messages of recent weeks have not encouraged stability and predictability at all, Finance Minister Alexandru Nazare said on Monday at a briefing at the end of a government sitting.
"I think that in the last few days, in the last few weeks, we have issued enough warnings about what could happen when Romania is going through a period of important political turbulence. That happens because investors, financiers and rating agencies are looking at two essential elements: one, whether the fiscal-budgetary trajectory for 2026 and the following years is credible and remains a trajectory that must be respected regardless of the situation, and, second, our ability to absorb European money. That is why both issues, our consolidation programme, fiscal-budgetary discipline and the fulfilment of the targets for 2026, as well as maximising the absorption of money from the National Recovery and Resilience Plan (PNRR), are essential. Political turbulence is seen as a main factor that could affect these two important goals of Romania. And the public messages of the last few weeks have not encouraged stability and predictability at all. As such, we have sent several signals related to both the level, the amount of financing we will pay, the level of interest, and possible pressures on the exchange rate, which, unfortunately, materialize," said Nazare, agerpres reports.
He added that there is a direct link between the pressure on the exchange rate and the stabilisation of the political situation and that, "when the political situation stabilises and there is predictability, these pressures on the exchange rate, as well as the increase in the level of interest rates, are tempered."
Nazare mentioned that the mere announcement regarding the motion of censure generated an increase in the level of interest rates.
"We talked about a level of interest rates that is increasing. The war in Iran has generated a steep increase in the level of interest that Romania pays on most maturities. At the time of the announcement, the mere announcement of the motion of censure also generated an increase in the level of interest rates and, at the moment, any other materialisation in this regard has an effect on interest rates. So, there are two important issues: the level of interest rates, but also, of course, possible issues related to the implementation of the PNRR, because it is less than four months until the PNRR is over. As such, it is essential that, moving forward, all state authorities, agencies, ministries, local public administrations that manage PNRR projects - and if we talk about the ordinance we approved today, the RON 10 billion for local public administrations - we are talking about over 11,000 projects. It is very important that moving forward the attention of the entire public administration is directed to the implementation of these projects and to get the money," he said.
Romania's national currency, the leu (RON), depreciated on Monday against the euro, with the Nationaal Bank of Romania (NBR) exchange rate putting the euro at RON 5.1998 lei, up by RON 0.0581 (+1.1%) from RON 5.1417, registering a new all-time high.
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