Romania’s broad coalition government has approved a decree to reduce jobs and spending across the public administration as part of efforts to tackle the country’s largest budget deficit in the European Union, officials said on Tuesday.
Under the measure, local authorities (town halls) are set to eliminate about 12,794 positions by 2027 at the latest, and roughly 10 percent of effectively occupied public administration jobs nationwide are expected to be cut overall. The reforms are designed to reduce personnel spending and streamline the public sector.
The government estimates the job cuts will save around 1.6 billion lei ($371 million) in 2026, rising to about 3 billion lei from 2027 onward, providing critical fiscal relief as Romania works to narrow its budget deficit from over 9 percent of GDP toward EU targets.
Local mayors have been given flexibility on implementing cuts, including the option to defer layoffs until 2027 if they reduce wage costs by 10 percent this year. Jobs already trimmed in central government in previous years are counted toward overall reductions.
Certain sectors such as state hospitals, the military and national security roles — have been exempted from some cuts under specific conditions, reflecting concerns about maintaining essential services while trimming administration costs.
The job cuts are part of a broader package that also includes support schemes, tax incentives, and state aid programs aimed at stimulating economic growth, with a combined impact of roughly 5 billion euros through 2032. The Romanian economy slipped into a technical recession late last year, adding urgency to fiscal reforms.
Prime Minister Ilie Bolojan has defended the measures as necessary to secure Romania’s investment-grade credit rating and meet EU deficit rules, even as the government navigates political disagreements over budget priorities.
Critics, including public sector unions and some local officials, argue the cuts could strain public services and undermine capacity at local levels, while supporters say they are essential for fiscal stability and long-term economic health.
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