Daniel Dăianu: Romania is not at risk of a downgrade from S&P, but the situation remains serious

Daniel Dăianu, President of the Fiscal Council, believes that the rating agency Standard & Poor's will not downgrade Romania, despite the country's prolonged political crisis. However, the economist warns that economic vulnerabilities have deepened, and the absence of a fully empowered government is seriously complicating both the budget rectification process and the preparation of the 2027 budget.

"The situation is very serious. We need a crisis government," Dăianu told Digi24 exclusively.

Why he believes Romania will not be downgraded

According to Dăianu, informed analysts are broadly convinced that S&P will not downgrade Romania, as the Bolojan government's performance in reducing the budget deficit has been exceptional.

"Going from more than 9% of gross domestic product down to 6% is, generally speaking, an extremely difficult achievement, and the fact that it happened in an exceptionally hostile international context makes it all the more remarkable," the economist explained.

Political instability, the main problem

Dăianu believes that the primary obstacle to Romania's economic progress is currently the political crisis and the lack of a fully empowered government.

"This political process, this profound breakdown, this collapse, the fact that we find ourselves in this situation (…) I said some time ago (…) I spoke of a civil war. It is not fought with weapons, but it is waged with words, with actions both overt and covert, in a way that shows contempt for citizens, with a profound disconnect from the concerns of ordinary people and the business community," he said.

The economist argues that the business community has repeatedly called for the formation of a fully empowered government, yet everything appears to be at a standstill. Dăianu stated that he does not believe the fall of the Bolojan government was warranted, even if certain aspects of how the budget deficit was reduced could have been handled differently: "But the direction was right, and a great deal was achieved."

A worrying outlook, even without a downgrade

Dăianu stresses that not being downgraded by S&P does not mean Romania's economic problems have been resolved. "Romania is not being downgraded at this moment, but the outlook is bleak," he said, noting that Finance Minister Alexandru Nazare has acknowledged the progress made, even though the burden of fiscal correction has not been shared equally, with some feeling the impact more than others.

According to the economist, one of the most urgent priorities is the budget rectification, followed by the drafting of the 2027 budget.