Pension reform, an urgent priority in the EU's recommendations for Romania in 2026

The European Commission announced on Wednesday the suspension of the excessive deficit procedure for Romania, whilst emphasising that the country continues to face significant macroeconomic imbalances. Although vulnerabilities related to budget deficits have somewhat diminished, they remain critically important for the country's economic stability.

The European executive presented the spring package of the 2026 European Semester, providing Romania with a clear roadmap for compliance with the EU's budgetary framework. The assessment covers the years 2025 and 2026, focusing on the control of net expenditure and the implementation of necessary structural reforms.

Pension system reform – a crucial measure

Among the key recommendations, the European Commission is insisting on the full implementation of reforms to both the general and special pension schemes. This measure is considered essential for safeguarding the long-term sustainability of public finances. Romania must accelerate this process in order to ensure the balance of the pension system in the context of an ageing population.

Romanian authorities are also urged to design and implement a public sector pay reform aimed at achieving greater equity. This measure will have a direct impact on the public budget and on services provided to citizens, including older people.

Improving tax collection and social protection

The European executive is calling on Romania to increase overall tax collection as a percentage of GDP, with a particular focus on closing the gaps in VAT and corporate tax revenue. This measure will help to better fund social protection systems, including those designed for older people.

In the social sphere, Romania must reduce the risks of poverty and social exclusion by expanding social protection and improving its effectiveness. This requirement is particularly important for elderly people who depend on pensions and social services.

Strengthening the labour market for all age groups

The Commission recommends strengthening labour market participation among underrepresented groups and addressing the skills shortage. These measures will also affect older people who wish to remain professionally active or to re-enter the labour market.

Romania must maintain a balance between expanding social protection and ensuring the sustainability of public finances. This entails careful management of social expenditure and a structural reform of protection systems, so as to guarantee adequate benefits for all vulnerable groups, including older people.