Romania Loses €770 Million EU Funds After Failed Salary Law Negotiations

Romania faces the loss of €770 million in European Union recovery funds after key political parties failed to reach an agreement on a unified salary law. The failure to pass the legislation, which was a requirement under the country's National Recovery and Resilience Plan (PNRR), means Romania misses out on a significant financial injection.

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Unfortunately, despite intense negotiations in recent months, the four parties have not reached a political and social consensus on the law.

President Nicușor Dan confirmed the collapse of negotiations on August 26, stating that despite intense discussions involving PSD, PNL, USR, and UDMR, a political and social consensus could not be achieved. The parties had committed to not submitting separate legislative proposals, but the lack of a unified approach has jeopardized the funding.

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PSD has irresponsibly and populistically compromised Romania's chance to collect 770 million euros, and to have a salary law that would bring order, more equity, and predictability to the budget system.

Prime Minister Ilie Bolojan placed direct blame on the PSD party, accusing them of irresponsibly jeopardizing Romania's chance to receive the funds and implement a more equitable and predictable public sector salary system. Bolojan highlighted that PSD had overseen three different ministers of labor without finalizing the project, which was initially due in 2022.

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The failure belongs to those who refused to vote for this project. USR said that, even though there are many shortcomings in the current version on the table, we would have taken the responsibility to vote for this project, precisely because there are still extremely many inequities in the current system.

However, political scientist Sergiu Mișcoiu argues that the responsibility is broader, encompassing all parties that have managed the sector over the years. He warns that the persistent legislative blockages have eroded public trust in institutions to a dangerous level, potentially undermining respect for state authority. PSD leader Sorin Grindeanu refuted Bolojan's accusations, stating the government was incapable of producing a fair law and was attempting to shift blame. USR's president also pointed to PSD's refusal to vote on the project as the primary reason for its failure.

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We can reach the stage where citizens no longer comply with public order.