Romania will lose some EUR 3 billion of European funds and will very likely be downgraded if it enacts the 40% pension hike already passed by the lawmakers, president Klaus Iohannis said in a press conference on September 23.

There are already discussions underway with the European officials, who informed that the budget earmarked for Romania would be reduced by some EUR 3 bln due to Romania exceeding the budget deficit limits.

President Iohannis also expressed serious concerns about the rating agencies downgrading to "very bad" Romania's sovereign rating, G4media.ro reported.

Technically, any downgrade, be it only one notch, would put the country's debt in the non-investment grade (junk) basket for foreign investors ironically just after the local exchange made it to the big league of emerging markets by the standards of FTSE Russell. 

(Photo: Presidency.ro)

andrei@romania-insider.com