Nazare: pensions could increase "prudently" in 2027; a VAT rise is not being considered

Alexandru Nazare, the proposed Finance Minister, stated after receiving a favourable opinion from Parliament's specialist committees that he has no desire to introduce new taxes next year. However, he emphasised that resources are needed to achieve the budgetary adjustment for 2027, which amounts to up to 1% of GDP relative to the current year.

"When we present the budget to Parliament, we will come with a complete vision for the 2027 construction. Clearly, we do not want new taxes, but at the same time we need resources through which to achieve the adjustment for 2027 and beyond," Nazare explained.

He specified that the Finance Ministry will incorporate proposals from all political parties in order to find, before the adoption of the 2027 state budget, the optimal formula for meeting the established budgetary target. "The main thing is to have a credible budget," the minister added.

What he said about pensions

Regarding pensions, Nazare stated that a cautious increase could be considered, to take effect from 1 January: "I believe we can consider a cautious increase. I don't want to pre-empt myself. (...) I'm talking about an indexation — a cautious one, I repeat. From 1 January."

The minister mentioned the risks associated with European funds and international assessments: "We risked a complete suspension of European funds, a danger we managed to avoid. You are well aware that we have been trying to avoid, and have indeed managed to avoid, the principal dangers related to sanctions concerning our performance." He insisted that all parties need to agree on a set of measures before the budget is adopted, in order to have a credible budget.

What he said about VAT

Nazare ruled out a VAT increase for 2027: "We have no plans to increase VAT for 2027. That is an important point. I know there have been assumptions regarding our intention to raise VAT. We do not wish to raise VAT."

He explained that, whilst a reduction in taxation would benefit the economy, the current context does not allow for this: "The question is, can we afford to do it? Especially given that we have only just escaped significant sanctions related to how Romania is being assessed." The minister noted that an S&P report is due to be published this week, and that in January and February Romania faces further evaluations from rating agencies.

Regarding the commitments in the governing programme concerning a VAT reduction, Nazare clarified that the measure would be implemented "as soon as this becomes possible," noting in this context that Romania is subject to an excessive deficit procedure, and that the forecast for exiting this procedure is somewhere around 2029–2030. "As such, I think it is premature to tell you today what the right moment would be — we need to be able to afford it," the minister concluded.