General principles for state reform and good governance, according to Romanian government's 2025-2028 Ruling Strategy

The new government's ruling program sets out a comprehensive and ambitious agenda to modernise Romania's public sector, enhance state efficiency, and ensure fiscal sustainability, all while promoting fairness and respect for citizens. The reform effort is structured around multiple strategic pillars, ranging from structural reforms and fiscal consolidation to investment prioritisation, decentralisation, and the rationalisation of public spending.
Strategic directions for state reform
The government affirms its commitment to restoring authority and coherence in public governance. A new legislative package will enable the restructuring of the state apparatus, including central public administration reforms through mergers, consolidations, and the elimination of redundant entities. This will be complemented by fair budget corrections and the elimination of privileges across the public sector.
State reform will be a collective effort involving all coalition parties, with a focus on increasing performance and accountability in public management, correcting social and economic injustices, and treating both citizens and companies with honesty and respect.
Increasing public revenues and fighting tax evasion
A major component of the program is a sustained effort to combat tax evasion and increase public revenues. Key fiscal agencies such as ANAF, Antifraud, and Customs will be depoliticised and reorganised around performance indicators, with digitalisation and risk-based inspections at the core of their operations.
The government plans to tighten legislation around tax evasion, enforce stricter insolvency laws to prevent abuse, and prioritise oversight in sectors prone to evasion, including oil, fruit, and vegetable imports, and services.
Additional taxation will be applied to gambling, cryptocurrencies, short-term rentals, and income from social media, while existing exemptions - especially in real estate - will be revised. Excess profits in sectors such as banking may be subject to temporary taxation, and companies benefitting from state support will be required to pay taxes on those activities.
Fiscal consolidation
To ensure long-term fiscal balance, the government proposes a recalibration of the tax system. This includes a reset of VAT rates, increases in excise duties, and enhanced taxation of dividends and large pensions.
A property tax aligned with market value and an ecological tax are also on the agenda, as stipulated by the PNRR (National Recovery and Resilience Plan). Public spending will be curbed through salary and pension caps.
Investment prioritisation and cost-efficiency
A new framework will guide the analysis and prioritisation of investment projects funded by the national budget. Local authorities will be required to co-finance projects based on their financial capacity, and projects will be assessed for sustainability using specific demographic and infrastructure indicators.
Cost standards will be revised, and government-funded support schemes will be restricted to those that promote exports, reduce imports, or create added value. The Anghel Saligny program will be subject to evaluation and rescheduling to ensure effectiveness.
Reform of local administration
The reform program also targets local public administration, aligning it with updated population data. National salary scales will be introduced for local authorities that cannot cover salaries from their own revenues, and staffing limits will be enforced. Incentives will promote local performance in tax collection and urban planning.
Coordination between Local and National Police will be strengthened, and public utilities operating without proper authorisation will be transferred to licensed regional operators.
Legal amendments to support reforms
To support institutional reform, the government will revise the status of civil servants and parliamentarians, simplify the Labour Code, and streamline the evaluation of both staff and institutional management. Reforms will also target the social dialogue law and collective labour agreements that have led to excessive entitlements.
Rationalisation of state-owned companies
A deep restructuring of state-owned enterprises is also planned. Boards will be composed of professionals, with a reduction in redundant governance structures. Where justified, staff reductions will be implemented.
Transparency will be improved through published budgets and contracts, and pay will be tied to responsibilities and measurable performance indicators. State subsidies will be reduced, and loss-making enterprises may be closed.
Asset audits will be conducted, and more companies may be listed on the stock exchange to increase accountability and efficiency.
Reform of self-financed public authorities
Autonomous institutions such as ANCOM and ASF will also undergo restructuring. Their operating laws will be amended, salaries capped, and non-essential staff reduced.
Any budgetary savings will either be reinvested in the market or redirected to the state budget.
Reform of central administration
Central administration will be restructured through simplification, decentralisation, and digitalisation. A dedicated digital department under the prime minister will standardise IT systems and databases.
Staffing levels will be recalculated and adjusted, excessive bonuses removed, and remuneration brought in line across the public sector. Efficiency in education will also be addressed, with a proposal to increase teaching hours and link scholarships more closely to student performance.
Improving the health system
The government aims to boost the performance of the healthcare system by reducing unnecessary hospitalisations and linking medical staff compensation to performance. Bonuses will be limited in indebted hospitals, and department heads will be appointed by hospital managers based on performance criteria. Joint procurement and hospital consortia will improve cost-efficiency.
The contributor base to the national health insurance system will be expanded by removing exceptions and taxing large pensions. In addition, inefficient hospitals will be converted into outpatient clinics or rehabilitation centers.
Expanding labour force participation
Measures will be introduced to reduce abuse in the granting of sick leave and disability benefits. Early retirement will be discouraged, and social assistance will be restricted to regions without available jobs. These steps aim to increase the number of active contributors to the economy.
Better use of natural resources
Royalties will be recalculated based on a more accurate assessment of natural resource usage, and the control capacity of ANRM (National Agency for Mineral Resources) will be strengthened to ensure compliance and fairness.
Reform of special pensions
Finally, the special pension system will be restructured. The retirement age for magistrates will be increased to 65, and payroll laws will be adjusted to avoid litigation and salary miscalculations. Pensions not based on contributions will be capped, and staff will be reclassified to ensure proper retirement age assessment.
In the judiciary, sentencing practices will be standardised and linked to performance benchmarks.
iulian@romania-insider.com
(Photo source: Inquam Photos / Octav Ganea)