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For the sustainability of public debt, given that the budget deficit reached 9.3% of Gross Domestic Product last year, a massive fiscal adjustment is necessary, i.e. a drastic reduction in public spending and better collection of revenues to the state budget, shows the report presented yesterday, at the National Bank of Romania, by Jeromin Zettelmeyer, director of the Bruegel Institute.
The need for fiscal adjustment was also highlighted by Mugur Isărescu, governor of the National Bank of Romania, who stated: "For Romania, the issue of debt sustainability has never been more pressing. The credibility of fiscal policy plays a crucial role in maintaining investor confidence, controlling borrowing costs and ensuring long-term macroeconomic stability. Understanding fiscal risks is essential for protecting the country's development and resilience.”
Economic analysts and financial experts argue that the adjustment must begin quickly with a drastic reduction in budget expenditures given that the budget revenues collected are much lower than what the state spends. However, instead of focusing primarily on a clear package to reduce these expenditures, the pro-European political parties that are currently negotiating the principles of the future government have discussed several solutions to increase revenues, including progressive taxation, the solidarity tax, the increase in VAT, but also the controversial taxation of banking transactions.
• Mircea Coşea: "I am worried about the economic illiteracy of the current political leaders”
Economic analyst, university professor Dr. Mircea Coşea, told the BURSA newspaper that he is dissatisfied that the current negotiation teams sent by the pro-European parties to the Cotroceni Palace are made up of people who are poorly trained professionally, incapable of finding solutions and, especially, of people who were in government and took measures that led the country to its current serious situation from a financial and economic point of view.
Mircea Coşea stated: "The thing that bothers me the most is the lack of preparation or, better said, the economic illiteracy of the party leaders. PSD confuses progressive taxation with taxation on a certain income ceiling. Mr. Sorin Grindeanu today (redactor note - yesterday) advanced a ceiling from which a solidarity tax or an additional tax would be applied. The same Mr. Grindeanu claims that there are several European countries that apply progressive taxation. What the PSD leader does not remember is the fact that in those countries progressive taxation is applied on income and not on salary. Income means not only salary, but also rents collected, interest received, dividends, cryptocurrencies, etc. Then a progressive income tax also requires the application of deductions for certain expenses, deductions that are not taken into account in the solutions proposed by the social democrats. Then how to apply such a tax from January 1, 2026? It is clear that the people in the negotiation teams sent to the Cotroceni Palace do not have the necessary training to provide a concept of strategy. In these circumstances, perhaps it would not be bad to think about the fact that, in order to overcome the crisis of 1929-1933, Romania turned to foreign economists. If we currently have only Socol and Câciu, I think it would be better to turn to a Nobel Prize winner in economics and pay him to provide us with a viable strategy. It is unacceptable that for three weeks we have been witnessing a blockage of the national economy by some dragging negotiation teams who have not offered any viable solution”.
Mr. Coşea also offered us several short, medium and long-term solutions that could right the adrift economic ship of our country. He argues that, although there is a need to reduce public spending, the measure of reducing personnel in the budgetary apparatus cannot be taken haphazardly, but only on the basis of criteria that would evaluate and establish the efficiency of such a measure. Therefore, in the short term, Mircea Coşea believes that in the first stage, there is a need for better collection of budget revenues and that is why tax evasion must be aggressively combated.
"ANAF must transform itself into an instrument of economic policy and stop protecting large companies with full or majority state capital and companies whose shareholders or administrators have ties to political parties. Then, it is necessary for each citizen to combat tax evasion through his behavior and to request documents for each service provided to him or for each good purchased”, Mircea Coşea told us.
After reducing tax evasion, in the second stage we should witness a restructuring of the budget apparatus, claims the economic expert, who mentions that there should be a division within this apparatus. Thus, suitable Mr. Coşea, the national services - Education, Health, Defense and Public Order - should not be included in the staff reduction mechanism, as they are currently understaffed. Then, according to the economic analyst, a territorial administrative reform should be carried out, because at the moment "there are too many UATs where money is being lost”, and then a merger of management positions.
"The massive reduction, without evaluation and efficiency criteria, of the budgetary apparatus would not be beneficial, because it would lead to an increase in unemployment expenses, especially since at the moment we do not have a performing system of professional reconversion and retraining at the national level, nor the number of jobs necessary for all the people who would be made redundant”, specified Mircea Coşea.
In the third stage of the economic and financial recovery of our country, Mr. Coşea believes that a fiscal reform will be needed, based on a ratio between labor taxation and capital taxation.
"I believe that the taxes paid by the business environment should not be increased, because companies must be supported to develop, create new jobs and thus bring, through taxes and duties, greater income to the state budget. I would also not increase taxation in matters concerning ordinary citizens, nor would I increase the level of value added tax. The increase in VAT will be reflected in production costs and this will lead to an increase in prices. I believe that there should be greater support from the state regarding certain industries of the national economy, which pull the economy up, such as IT, construction and agriculture. Then a structural reform of the national economy is necessary, because the budget deficit is also a consequence of the fact that most companies in the economy can no longer cope with the changes occurring at the international level. This has led to the exponential increase in the trade deficit, which is a generator of the budget deficit, especially since we import more than we export and we are not even in the Eurozone. At this moment, the structure of the national economy can no longer cope a necessary balance between imports and exports, and these things must be regulated through a strategy, through a country program or a government program. Basically, we must give up the patches proposed by the current negotiating teams of political parties, patches that solve certain problems punctually, for the moment. The inability of the economy to balance the import-export balance means that the deficit will remain high. To solve this problem, we need to grow the raw materials processing industries and raise the level of technology, that is, from the transition of our economy from the industrial revolution of stage 2 - manufacturing - to the industrial revolution of stages 3 and 4”, Mircea Coşea pointed out.
• Taxing banking transactions - a measure proposed, debated, but not assumed by anyone
Returning to the measure of taxing banking transactions, this was put on the negotiating table, without any assumption from any political party - PSD, UDMR, PNL and USR denied that the idea belonged to them, nor from Nicuşor Dan's new presidential advisors, who stated, after the measure was harshly criticized by the business environment, citizens and financial experts, that it no longer matters who brought up this taxing of banking transactions.
It is certain that the people who proposed the tax also estimated a positive effect on the state budget, i.e. the collection of a fixed annual income of approximately 50 billion lei. Which is plausible, if we take into account the fact that according to data from a study published last fall by the Romanian Association of Banks and conducted by the Romanian Institute for Evaluation and Strategy, 21.7 million cards were active at the national level, of which 2.5 million cards belong to people who receive their pension in this way, and 3.5 million represent cards intended for transferring state child allowance. Moreover, according to the National Bank of Romania, the value of online transactions carried out only with bank cards exceeds 100 billion lei annually. To these transactions are added others, which raise the value of card transactions to approximately 500 billion lei, for 2 billion annual transactions.
Practically, the introduction of a fixed fee of 1 leu and 3 lei - depending on the value of the transaction - or a quota of 0.2% of the transaction value would bring a constant, secure income to the state budget, without any effort from the Ministry of Finance or ANAF.
However, none of the initiators of this proposal took into account the negative impact that such a tax would have on the monthly and annual incomes of families in our country.
• Loss between 8600 lei and 12,000 lei annually for a family
Introducing a tax on banking transactions would practically mean a devaluation, a theft, that the state would commit, with documents, from all individuals and legal entities in Romania. Although apparently insignificant, its universal application - to any banking operation - would have a disproportionate impact on the low-income population and on small entrepreneurs. Financial experts say that the idea of such a fixed tax, regardless of the value of the transaction, blatantly contradicts the principle of fiscal fairness and risks being qualified as regressive, even unconstitutional. One of the most serious consequences of this measure would be the accelerated regression towards the informal economy, based on cash. Bank payments - whether by card, online or through transfers - would become expensive for the average citizen, stimulating the use of cash and reducing financial traceability. It is ironic that a measure designed to "tighten tax ranks" would discourage exactly the correct fiscal behavior and digitalization - two objectives assumed and promoted so far by governments in the last five years.
In this sense, the warnings coming in recent days from the banking and economic area should also be read, which unanimously state that the introduction of such a tax will lead to increased inflation, decreased banking (already the weakest in the EU), encouraging migration to cryptocurrencies or foreign accounts and increasing the state's financing costs. At the same time, such a tax can block investments in digital infrastructure and penalize exactly the vulnerable categories - pensioners, unemployed, social welfare recipients - who receive money through bank transfers.
To understand the real impact of this measure, we can take as an example a common situation from everyday life: a family of three members (two adults and one child over 14 years old), each with a bank card and a high level of use of digital payments. Let's assume that one of the family members, a professionally and socially active person, makes an average of at least 5 banking transactions daily. These include payments for transportation, meals out, small and large purchases, bills, transfers to friends or relatives and other daily expenses.
Let's also assume that a fee of 1 lei were established for transactions up to 20 lei and a fee of 3 lei for those exceeding 20 lei. If approximately 30% of the transactions of the adult person mentioned above are under 20 lei, then three of them will be charged 1 lei each, and the other seven, being over 20 lei, will be charged 3 lei each. Thus, in a single day, this person would pay 10 lei just in bank fees, which means at least 300 lei per month. It is a considerable amount, equivalent to a consistent bill or even a monthly installment for a loan. If we consider the annual loss for that person, it would be approximately 3600 lei.
Extending the analysis to the entire family, which would together make an average of a minimum of 10 banking transactions per day, the costs increase significantly. Of the 10 daily transactions, about 5 would be under 20 lei, and the other 5 above this threshold. Applying the same logic, the family would pay 5 lei daily for small transactions and 15 lei for large ones, totaling 20 lei per day. Monthly, this amount reaches 600 lei, which means over 7,200 lei per year - a considerable loss that could affect the budget of any family with average or even above-average income.
Then, in addition to the direct financial impact, a series of associated costs also arise. First, the use of modern banking instruments is discouraged, which will lead many people to return to using cash. This trend will reduce the traceability of funds, make it more difficult to manage personal and family budgets, and increase the risk of theft or loss. Second, the intensive use of cash involves time wasted on frequent withdrawals from ATMs and more complicated logistics in managing daily expenses. Moreover, families will be forced to rethink their financial habits, limit the number of transactions, and even avoid payments by card or banking applications, which completely contradicts the direction of digitalization promoted so far. In conclusion, the introduction of this fixed tax on banking transactions, although it seems modest at first glance, could have major financial and behavioral effects on the population. The example of an ordinary family shows that one can easily accumulate over 1,000 lei per month from these fees alone, a significant fiscal burden that directly affects citizens who use banking services transparently and responsibly. Instead of encouraging modernization and fiscal compliance, the proposed measure - and subsequently disavowed by political parties - risks penalizing exactly the right behaviors and causing a dangerous return to the informal economy.
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Liră sterlină
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