Parties Resume Fiscal Talks, No Deal Yet on Tax Measures

Party leaders and experts meet again on Wednesday at the government to discuss the package of fiscal measures that the next Executive will have to adopt in order to reduce the budget deficit. This is the third round of discussions this week.

The negotiations are scheduled for 3:00 PM.

The parties did not reach a consensus during Tuesday’s talks either, when they discussed state spending cuts, with plans to calculate the budgetary impact of the proposed savings, according to HotNews sources.

Today, the leaders of the parties seeking to join the government will discuss tax and levy measures with experts.
PSD insists on progressive taxation

PSD continues to advocate for progressive taxation, as well as a temporary solidarity tax. Regarding progressive taxation, the Social Democrats propose an initial threshold of 12,000 lei. Those exceeding this income would pay a higher tax on the amount above the threshold. The tax rate would range between 16% and 20%, with the exact percentage to be discussed with the other parties.

Asked whether UDMR would agree to a solidarity tax on net incomes above 10,000 lei, the leader of UDMR’s deputies, Csoma Botond, stated that UDMR wants to keep the flat tax:
“That would essentially mean progressive taxation, and we want to maintain the flat tax. So, in principle, we would not agree.”

However, one measure on which all four parties agree is the taxation of gambling and betting. Discussions are ongoing about raising VAT back to 19%, along with an additional 20% tax on winnings or possibly taxing every transaction.

Another proposal on the table is to introduce health insurance contributions for pensioners with incomes above 2,500 lei—a measure PSD opposes.

Asked about PSD joining the government, party spokesperson Florin Manole said:
“If the other dialogue partners come with acceptable measures or agree with ours, we can talk.”
Interim PSD president Sorin Grindeanu also said on Wednesday:
“If someone wants to be prime minister and wants all four parties in the coalition, and if an agreement is reached on fiscal measures, then the next step is quick political negotiations.”

Another option considered was a “bank transaction tax”. According to Profit.ro sources, if implemented, it would charge 1 leu per transaction up to a certain amount, and 3 lei above that.

Asked on Wednesday whether this measure was still on the table, Grindeanu replied:
“It was. I hope it’s no longer there. We should not discourage interbank transactions by taxing them. That’s why we do not support such a tax, and I don’t know who proposed it.”

He added:
“If we apply a 20% tax from January 1st on income above 12,000 lei, it would generate around 12 billion lei. We need a few months’ buffer before implementing progressive taxation. Until January, we could talk about a solidarity tax, which is also a progressive tax aimed at high and very high incomes.”

Both USR and UDMR oppose this measure. USR leaders have repeatedly stated they are only willing to join the government if the future Executive commits to real reforms.

After multiple delays in finalizing the fiscal package, party leaders now hope to reach a consensus on deficit-reducing measures by the end of the week. Depending on the final plan, PSD and USR will decide whether or not to join the government.

Nicușor Dan Reportedly Has Veto Power Over Ministers

On the other hand, the parties have not yet decided who they will send to the Victoria Palace and there is still a fight over ministries. PNL does not want to leave the negotiations without Development, nor PSD without Transport. However, the new names that should appear in the new Government will pass through the hands of President Nicușor Dan, through a veto procedure, Digi24 sources claim. A huge problem remains with the prime minister. No one is now crowding in, at least in the discussions behind closed doors, for this position.

President Nicușor Dan said that we should have new ministers in the Government, but according to Digi24 sources, more or less the same people are being considered.

PSD Would Get the Most Ministries, Including Justice and Transport

PSD is expected to receive the most ministries — six or seven. The Social Democrats are determined to secure the Transport Ministry for Ciprian Șerban and the Justice Ministry for Radu Marinescu, the current minister. Sources say Mihai Tudose is also seeking a seat in the government, potentially at the Interior Ministry. However, since the Interior is likely to go to PNL’s Cătălin Predoiu, PSD might instead take the Defense Ministry. Still, sources say Tudose may not have strong support within the party.

In this scenario, PSD would also retain the Economy and Labor ministries, with the same ministers. PNL, in turn, wants to keep most of its current portfolios and ministers. One of their non-negotiable positions is the Ministry of Development, with Adrian Veștea mentioned as a candidate. The same demand was made during the formation of the last government, but the portfolio ended up with UDMR.

UDMR Could Keep Finance and Development

There is concern within PNL that PSD might strike a deal with UDMR and back them to take over Development. UDMR could retain Finance and Development, or possibly take back the Environment Ministry, which they’ve held before. If Environment goes to USR, Diana Buzoianu is being considered.

USR Wants the Justice Ministry

USR wants the Justice Ministry for Alexandru Dimitriu and is also eyeing the European Funds Ministry. If they end up with a smaller portfolio, like Culture, George Gima might be their pick. Oana Țoiu is being considered for the Labor Ministry, and the Foreign Affairs Ministry is also in discussion for a USR nomination.

While PSD interim president Sorin Grindeanu stated that ministerial appointments are the party’s decision, sources from Digi24 suggest a different scenario: an informal veto by Bucharest Mayor Nicușor Dan. Parties may propose ministers, but Dan would have to approve them.

As for the prime minister position, Ilie Bolojan insists he’s not attached to the role and would allow PSD to claim it. However, sources say this may be a strategic stance, and PNL is confident Bolojan will become the next prime minister.