European Semester 2026 - Questions for STAKEHOLDERS for the fact-finding mission of January 2026 

European Semester 2026 

ROMANIA

Questions for STAKEHOLDERS for the fact-finding mission of January 2026 

Meeting 1 - Competitiveness & labour market

1. Business environment

• According to the latest EIB Investment survey for Romania, the share of Romanian firms investing is below the EU average (78% vs 86%). Potential reasons could be a high share of Romanian firms that are finance constrained compared to the EU average (10.2% vs 6.1%), low sentiment - Romanian firms anticipate a deterioration (45% for Romania vs 22% for the EU) of the political and regulatory environment - and a weak economic outlook. What do you think are the biggest structural obstacles for Romanian firms to invest more, and how would you suggest overcoming them?
• The cost of financing – which is much higher than in other EU countries.
• Romanian state financing vs. private companies financing (crowding out effect – the public debt to GDP ratio increased from approx. 37% of GDP in 2020 to approx. 60% of GDP in 2025.
• The low level of banking intermediation measured as non-governmental credit to GDP ratio (about 24% of GDP, which is about one third comparing to EU counterparts).

As the fiscal policies in 2025 had as a result the depression of internal consumption (higher taxes – VAT, excises, health contribution increases in terms of “enlarging” the fiscal base, higher local taxes starting 2026), local companies have no “positive expectations” regarding a stronger economic outlook.

• Related to administrative burden, what would you see as the main barriers to businesses in Romania? Which public services or administrative procedures relevant for business are currently perceived as the most challenging? Do large firms, SMEs and startups have the same burden?

Besides the cost of doing business in Romania which is increasing (in terms of financing, taxes, energy price, etc.), the ad-hoc changes with no proper infrastructure are affecting more the SMEs and startups than larger companies – in terms of administrative burden. For instance:

• Ad-hoc changes in the dividends rate taxation (ex. 8% in 2024, 10% in 2025, 16% in 2026),
• Administrative costs for increasing the minimum capital requirement which will be probably higher than the effects. As an example:
  • The increase of the minimum capital requirement for limited liability companies (LLC, SRL), from 200 to 500 RON, and to 5,000 RON for companies with a turnover higher than 400,000 RON – until December 2026. Such increases will raise the administrative burden for the companies more
  • The need for the microenterprises to have at least 1 employee hired full-time (not fractional), from the start, in order to keep their status.
• Ad-hoc changes in terms of new taxes for big companies: “pillar tax”, “minimum turnover tax” – which will ultimately be leading toward an increase in the cost of doing business.
• The long duration of resolving disputes between companies and between companies and the Romanian state in the judicial system.
• Some lack of expertise in terms of judges understanding the real sector.

• Context: Romanian SMEs lead the EU charts for trade credit and self-financing. They also lead the financial constrained companies’ rankings. Bank loans for SMEs are low in EU comparison and interest rates are high (see SMEs Access to Finance Index 2024). What is needed on the banking side for the SMEs to take more advantage of bank loans? (please address: level of competition in the banking sector, credit standards, exposure of foreign/nationally owned banks to SMEs and industry)

The inflation environment due to the suboptimal economic policy mix is leading towards a high-interest rate environment which is discouraging investment loans. Some (big) companies delay intentionally the payments towards their subcontractors (ex: some companies have as an internal procedure to pay the invoices just after 60 days, which is increasing the cost of doing business). The level of competition of the banking sector is low in terms of financing, as the banks are encouraged to finance the public debt, not the real sector.

• What is the impact of the consolidation packages on the capacity of SMEs to self-finance?

As the dividend rate (ad-hoc) has doubled in less than 1.5 years (from 8% to 16%), shareholders are rather encouraged to drain financial resources from their own companies (to legally avoid higher taxation), leaving less resources available as working capital. While this led to a temporary increase to the public debt revenue (base effect), the dark side is the decapitalization of SMEs which also face a high-interest rate environment.

• What are the main challenges for retail companies in Romania? What are the specific challenges for retail SMEs? What would you see as the main area for policy/regulatory or simplification action at national and EU level to address these challenges?

High inflation and a depressed consumer market conducted by:

• Real decrease in purchasing power: public state wages and public pensions are frozen for at least 24 months (2025, 2026).
• For the first time in 14 years, the average wage recorded a negative real growth
• Freezing the public wages (instead of a real restructuring of the public sector) lead to a ripple effect in the private wages.

• What are the main challenges for promoting investment in innovation for SMEs?
• The total lack of fiscal predictability,
• The high cost of financing,
• The high inflation rate as a public took to cover some of the fiscal deficits,

2. Labour market, skills & adult training

General overview of the Romanian labour market

The persistent "pro-cyclical" directions of the economic policy mix - specifically fiscal policy, but also monetary policy manifested through persistent inflation in the current economic development cycle - starting in 2015 and continuing to the present, were of such a nature as to lead the Romanian economy into a critical situation by the end of 2024. Our evaluations lead clearly to the conclusion that the adjustment of the budgetary imbalance should preferably occur on the expenditure side (excluding wages, which are the primary driver of Romania's economic growth engine, namely via consumption), while strictly limiting adjustments through increased taxation. In every prior crisis stage, tax hikes have proven harmful to the Romanian economy.

In the absence of correct and persistent economic policies in the general interest of the economy, there is a possibility that over what would be an "extremely long" horizon - specifically 20 years - real income per capita may actually decrease over two decades, as evidence demonstrates in the cases of Greece and Italy (2004–2024).

We consider the current moment and the policies applied to the Romanian labour market to be critical; the 2025 adjustment began in direct opposition to the goal of full employment under low inflation. Consequently, 2025 marks the debut of "Great imbalances in the Romanian labour market," which, given the actions and inactions of macroeconomic policy decision-makers, tend to grow even larger in 2026.

The labour market was weakened in 2025, recording both a decrease in real terms of the total wage tier (relative to the doubling of inflation) and an increase in the number of unemployed persons in the economy. The number of unemployed reached its highest level in the last eight years (compared to July 2017, excluding the pandemic period).

The evolution of wage earnings in 2025, in the absence of an international crisis (such as 2008–2012 or the 2020 pandemic crisis), marks a premiere for Romania: in real terms, wages in the economy have decreased significantly. Regarding the structure of personnel restructuring in the public sector, we argue that cutting over 30,000 positions in education and the retirement of over 5,000 personnel from the Ministry of National defence (MApN) does not constitute "reform."

In our opinion, the reform of public sector wage policy should start with increasing public sector efficiency to lead to expenditure reductions.

Relative to an inflation rate of 9.9% (compared to August 2024), the monthly real wage fund in the economy decreased to 40.58 billion RON in terms of purchasing power (in August 2024 currency) - falling below the nominal value of 41.67 billion RON recorded in August 2024.

Simultaneously, we note a decrease in the number of employers in the economy, which reached 583,794 companies/institutions in August 2025—9,225 fewer than in August 2024.

The decrease in the real wage bill in Romania, combined with the declining number of labour contracts, significantly affected the economy as early as 2025 and created the premises for an even greater imbalance in 2026, with the most severe effects felt from the third quarter of 2025 onward.

As a result, the unemployment rate reached an eight-year high (6.1%) due to economic policy measures and in the absence of external shocks. The number of unemployed exceeded 500,000 for the first time since July 2017, and the monthly average number of unemployed in 2025 was 40,000 higher than the 2024 monthly average.

In our opinion, increasing taxation without any significant reduction in public spending (as shown in the study)—essentially without any reform regarding expenditures—has already created negative effects in the Romanian economy that will be amplified and persist over a very long term: a lost decade.

Analysing the direction of "savings" achieved through investment cuts, job losses, the decrease in the number of employers, and the decline of real wages—consequences of preferring "patchwork" policies and the over-taxation of already compliant taxpayers (tax hikes instead of expenditure rationalization)—we observed that the rents thus extracted from the economy (generalized losses) were primarily directed toward increased interest payments to creditors.

Regarding this aspect, our documentation and data show that for the first time since the beginning of the Romanian economy's transition to a market economy (December 1989), resources that are critical for the functioning of the state (for example, receipts from wage and income taxes—intended to ensure basic state services: roads, schools, hospitals, public order, and justice) are being directed almost entirely toward interest expenses on public debt.

Simply put, the "austerity" and "weakening of the economy" caused by the major imbalances affecting the labour market in 2025 and 2026, namely:

• Labor force disengagement (an eight-year high in unemployment);
• The decrease of the wage bill in real terms;
• Persistent inflation, generated by over-taxation and a weak capacity for administration and supervision (for example, in the field of electricity prices);

...have been undeniably directed toward increased profitability for financial capital and, essentially, toward a weakening of the financial levers critical to the functioning of the Romanian state.

Simply put, the money that should be directed toward the functioning (and development) of the state is being redirected - following the persistent macroeconomic policy mix - toward the increased profitability of creditors and the weakening of essential public services, coinciding with a decline in the general standard of living for the Romanian population.

Therefore, from the results perspective: not efficient.

• The general unemployment rate recently increased to 8 years high (5%), more than 500,000 unemployed,
• The ad-hoc fiscal measured contributed to more pressure on the employment, while the labour market already reached its peak in 2024.
• Public statements from the government like:
  • “People who will be dismissed from the public sector will find jobs in the private market”,
  • “The higher wages are dangerous”,
  • “People should accept lower wages”.

seem awkward, out of the reality during the current market conditions and high inflation.

 

• How do you assess the efforts of the Romanian authorities in improving the effectiveness of the active labour market policies, in particular for addressing the low employment rates of women and young people?

A: While the relevant authorities have initiated various strategic measures - including targeted programs, digital transformation initiatives, and projects funded through the Education and Employment Programme (EEP) and the National Recovery and Resilience Plan (NRRP) - the resulting impact remains limited. This underperformance is attributed to two structural deficiencies:

• chronic underfunding of active measures;
• an over-reliance on immediate financial measures (subsidies/bonuses) at the expense of sustainable interventions like relevant vocational training, professional guidance - counselling and integrated services (employment - training - social services);

Observations:

• very low expenditure on active labour market policies - high share of poorly targeted employment subsidies);
• general employment: in 2024, the employment rate for the 20–64-year-old group was 69.5% (National Institute of Statistics, Romania).
• female employment: the female employment rate is well below the EU average;
• youth employment: the youth employment rate was 18.7% (EURES/Eurostat).
• NEETs (15–29 years): one of the highest values in the EU: 19% (2024)

 

Necessary measures

• focus on measures with sustainable impact: shifting the focus from "subsidy to employment" to "skills + placement + retention" (including job quality clauses: decent wage, predictable schedule, health and safety, access to training – see also Quality Job Act);
• effective targeting of women: integrated packages for the return to the labour market (flexible working arrangements negotiated through Collective Labor Agreements (CLAs), support for the transition after parental leave, nursery / after-school programs, anti-discrimination and anti-harassment measures);
• real targeting on young people: career counselling in the school-work transition, extension of apprenticeship and dual training (dual training should necessarily include the condition of employing work-ready graduates), continuous professional development (CPD) programs (measure of adaptation to the requirements and realities of the labour market), national/regional/local partnerships with employers and trade unions, "second chance" programs;

• How do you assess the effectiveness and capacity of the Public Employment Services (ANOFM/AJOFM) to bring vulnerable jobseekers into employment?

It should be noted that for the last years, the Romanian authorities’ efforts seemed more directed towards bringing in migrant workers and not to bring vulnerable job seekers into employment.

Public Employment Service (PES) at national and regional levels - ANOFM/AJOFM -provides a necessary minimum of services and has progressed on digitalization, but the ability to facilitate the employment of vulnerable people remains regionally inconsistent and affected by: administrative burden, inadequate staffing levels and especially for individual counselling (deficiencies regarding the level of professional training / skills), poor cooperation with social services and the training programs being poorly aligned to the demand of the labour market.

Observations:

• absolutely necessary to increase the efficiency of PES - Active Labor Market Policies (ALMPs) are poorly targeted – continuous professional training is poorly targeted and provided;
• PES invokes positive European assessments on modernization/digitalization, which is positive and useful, but insufficient if it is not based on the real capacity for a more personalized approach (case management) and if sustainable accompanying measures for transitions and employment are not taken into account;
• The increase in the number of collective redundancies in certain sectors exposed to restructuring creates a specific pressure on PES/ANOFM, which relies on a predominantly reactive / post-dismissal intervention model, with limited impact on reintegration into work;

 

Necessary measures:

• the quality of employment (of the job) as an explicit objective: placement in precarious employment increases turnover and return to unemployment (individuals often slip into informal unemployment, which drastically decreases access to services and further destabilizing the situation of the persons concerned);
• case management for vulnerable categories;
• national/local partnerships (ANOFM - Social Partners and AJOFM + local authorities + employers + trade unions + training providers) with clear targets on deficit sectors;
• Integrating employment services with social assistance (transport, childcare, health, housing) - otherwise active employment measures do not translate into sustainable employment;

• the creation, within or under the coordination of ANOFM, of dedicated outplacement teams, automatically activated at the notification of collective dismissals, with intervention during the notice period (counselling, skills assessment, retraining and labour mediation), in partnership with trade unions and employers;

• How do social partners assess the social dialogue system in Romania following the adoption of the new Social Dialogue Law (No. 367/2022)? Has it stimulated collective bargaining coverage?

Another striking example of flawed implementation of laws consists in the fact that the government applies and enforces legislation in a discretionary way. A very specific example is the Romanian transposition of the Directive (EU) 2022/2041 on adequate minimum wages in the European Union. The authorities failed to update the minimum wage in the first year of implementation (the minimum wage was supposed to increase on January, 1^st, 2026, according to a specific formula implemented by law. However, the increase was delayed, and the formula was not applied).

Implementation and impact of Law no. 367/2022 on Social Dialogue

Romania has seen a genuine advancement in social dialogue due to the adoption of Law no. 367/2022. Following an 11-year absence of sectoral collective agreements, the new legislation facilitated the registration of seven (7) such agreements that are currently active. These collective agreements cover the sectors of insurance and reinsurance activities, pre-university education, culture, construction, social assistance, banking activities, and health. A forthcoming agreement for the veterinary sector is also expected to be registered soon.

Despite these gains, there is still considerable potential for improvement. A major obstacle remains the reticence of certain social partners, particularly employers, to engage meaningfully in sectoral collective bargaining.

Conversely, state-owned companies, which have the potential to drive collective bargaining efforts, remain largely absent from sectoral social dialogue in many sectors. Moreover, there are serious infringements on trade union rights and freedoms within these companies. A notable example is the National Company `Poșta Română`(Romanian Post), where the employer has reportedly ignored court rulings won by the union against the employer concerning the protection of union representatives' rights.

It is further observed that several legislative acts passed after the adoption of Law no. 367/2022 have undermined the rights established by the social dialogue law. These changes impact public institutions and authorities, as well as autonomous registries and state-owned companies. Specifically:

• It has been observed that the right to collective bargaining for state-owned companies and autonomous registries has been essentially suspended via emergency ordinances. A clear example of this is Government Emergency Ordinance no. 156/2024 regarding fiscal-budgetary measures, which specifically provides in Article 12² the following:
• By way of derogation from the provisions of Article 97 of Law no. 367/2022 regarding social dialogue, collective labour agreements are negotiated, according to the law, only after the approval of the income and expenditure budgets of the economic operators, within the limits and under the conditions set out in those budgets.
• The rights established under collective labour agreements concluded after January 1, 2025 shall be granted in accordance with the legal provisions in force at the date of their granting."
• and at article XLI it is provided that "(4) Commencing January 1, 2025, bonuses, premiums, severance payments, gratuities, or any other wage-type entitlements for withdrawal from activity as a result of retirement, cannot be provided in the collective/individual labour contracts of economic operators applying the provisions of chapter III."
• (5) The granting of the rights provided for in paragraph (4) in the case of collective/individual labour contracts of economic operators in force on January 1, 2025 is done in stages, over a term of 5 years, in equal annual instalments."

It is further observed that public policies are trending toward the restriction of collective bargaining rights. This is being achieved through the introduction of subsequent legal provisions targeting state-owned companies and autonomous registries. Simultaneously, derogatory legal measures have imposed a significantly more restrictive regulatory framework for collective bargaining within public institutions and authorities.

• The requirement that state-owned companies must have approved budgets before negotiating collective labour agreements directly undermines the right to bargain. In practice, these budgets are often approved with significant delays - sometimes as late as November. This timeline makes it virtually impossible to conclude a collective agreement within the calendar year, even when a previous contract has already expired. Consequently, workers are left in a vulnerable position, temporarily losing access to rights and protections previously guaranteed by their agreements.

Even when an approved budget includes a salary envelope intended for raises for that year, the delay in starting collective bargaining - often pushed to year-end - renders effective negotiations nearly impossible or extremely difficult. There is simply not enough time remaining in the fiscal year to process and pay out these increases. This creates a recurring problem: since the following year’s budget is based on the actual salary expenditures of the previous year, failure to negotiate raises in one year negatively restricts the financial baseline for the next.

This systemic issue not only interrupts the continuous coverage of workers by collective labour agreements within state-owned companies but also directly impairs the bargaining capacity of the parties regarding wage increases. In this context, a dual impact is identified:

• On one hand, a primary consequence is the "brain drain" of specialists from state-owned companies to the private sector. This migration diminishes their economic capacity and undermines the overall operational efficiency of these companies.
• On the other hand, since state-owned companies operate in the same market as private ones, the principle of free competition is affected. Unlike the public sector, the private sector faces no similar legal barriers to collective bargaining. This imbalance can, in principle, lead to higher labour costs for private companies and, by extension, increased production costs.

Misinterpretation and non-compliance with legal provisions by public authorities

Another significant concern is the presence of legal misinterpretations and direct violations of legal provisions by authorities. Instances of non-compliance with the Social Dialogue Law have been observed within certain regional labour inspectorates, alongside inconsistent application of the law across different regions.

To address the inconsistent application of the law, it is recommended that internal norms for uniform enforcement be established. Through these norms, the Ministry of Labor or the Labor Inspection - as the central coordinating body - could provide the regional labour inspectorates (ITMs) with the necessary guidance to ensure legal provisions are interpreted and applied correctly.

Specifically, cases have been documented where regional labour inspectorates registered collective agreements signed by employers and employee representatives, even after being notified that a legally entitled union held the exclusive right to negotiate a collective agreement at company level. This practice effectively strips the union of its bargaining power and prevents it from initiating legitimate labour disputes for the entire duration of the illegally registered (by the regional labour inspectorates) collective agreement.

Another example of misinterpreting the provisions of the Social Dialogue Law involves the registration of the collective labour agreement for the health sector. In this case, negotiations included two representative sectoral federations, and the National Trade Union Bloc (BNS) confederation. BNS participated on behalf of its affiliate, the Ambulance Federation, which represents over 7,500 public ambulance workers. Although this federation represents a significant number of workers, it does not meet the legal threshold for sectoral representativeness on its own, due to the total size of the healthcare workforce.

However, regarding this specific case, Law 367/2022 provides the following under Article 103:

Article 103. - National-level representative trade union and employer confederations, according to this law, may participate in sectoral collective bargaining, if they have member employers, trade unions or federations within that sector, as the case may be. Their participation is contingent upon a formal request and a mandate granted by those members.

This article was specifically included in the legislation to encourage the broadest possible participation in sectoral collective agreements. By doing so, it ensures that more workers within a sector are covered, thereby increasing the likelihood that the agreement can be extended to encompass the entire sector under the mechanisms established by Law no. 367/2022.

Unfortunately, the Ministry of Labor interpreted the law in a way that denied the national trade union confederation its recognized right to sign the sectoral agreement on behalf of its non-representative affiliate. As a result, the Ministry proceeded to register the agreement using only the signatures of the two representative sectoral federations, effectively sidelining the trade union confederation.

Moreover, the correlative application of this interpretation across various sectors, to other sectoral collective agreements, would lead to the violation of the provisions of article 103 of Law no. 367/2022. By excluding certain groups from signing, the scope of these agreements is narrowed, which in turn diminishes the statistical possibility of achieving sector-wide extension. This results in a systemic failure to protect the collective rights of a large portion of the workforce.

In our opinion, this practice directly contradicts both the explicit requirements of Article 103 and the fundamental spirit and purpose of the Social Dialogue Law. The primary objective of this legislation is to maximize the number of workers protected by collective labour agreements; however, this restrictive interpretation actively undermines that goal.

• Is the labour taxation system designed in a way to stimulate labour market participation, given the relatively high tax wedge? If not, what better options could there be in this respect?

No, it is not. The taxation of wages in Romania, especially through the high mandatory social contribution (CASS – for pensions 25%, CAS for healthcare – 10%) seems excessive.

Better options:

1. To review the level of social contributions (decrease),
2. After reviewing and a reasonable time for implementation, to evaluate the results (level of employment),
3. To carefully study after step 1 and 2, the possibility of a progressive taxation system.

• What are the main drivers of undeclared work in Romania and which are the sectors where it is most prevalent? What measures are needed to tackle undeclared work and bring affected people into the formal labour market?

The main drivers of undeclared work are :

• The excessive taxation of revenues from work,
• The prevalence of the Romanian state to favour tax evasion (currently the Romanian VAT GAP is the highest in the EU),
• The excessive taxation becomes more excessive, during downturn,
• The highest rate of undeclared work is in constructions, services, hospitality industry (HORECA). Some undeclared work (not in full) might be disguised as “business to business” contracts, in the consultancy sector – especially for higher wages.

The most efficient measure to tackle undeclared work:

• Find and penalize the financial sources for paying the undeclared work – in our opinion, the VAT GAP is the major source for paying undeclared work – follow the money
• Digitalisation – design an “early warning indicators panel” with red flags for companies on a “watch list” – which may pe probe to tax evasion and undeclared work.

 We can add that undeclared/"grey" (shadow economy) work is fuelled by

• vulnerability (rural, poverty – including in-work poverty, low education);
• inconsistent application of the rules;
• institutional and social tolerance;
• cost pressure and unfair competition;
• lack of public services (care, community services) that drives people toward the informal sector.

Observations:

• The OECD estimates undeclared work at approx. a quarter of the private sector (mainly prevalent in agriculture, construction and care services);
• there is also under-declared work (`under-the-table` payments exceeding the officially registered amount.);

 

We recommend supplementary measures, such as:

• Smart control + prevention: risk-based inspections (subcontracting, construction sites, seasonality);
• Facilitating/stimulating formalization: reducing the administrative burden for micro-employers, simple schemes for casual work (but with contributions and protection).
• wages and collective bargaining: Expanding Collective Labour Agreement (CLA) coverage reduces wage dumping and the "grey area".

• What are the most important skills that employees/adults in Romania currently lack and in which sectors? What are you doing or planning to do to address skills shortages and mismatches? How could the national authorities improve the situation?

The biggest gaps are in basic and applied digital proficiency, technical skills for industries with a shortage (machine building, construction, utilities and installation, transport, industrial production) and transversal skills (communication, teamwork) – the shortage is aggravated by migration, demography and the poor/unequal quality of lifelong learning.

 

Observations:

• Digital skills: In 2023, only 28% of people aged 16–74 had at least basic digital skills (the lowest in the EU).
• adult learning participation rate: Romania has a very low level (adult participation in learning reported: ~5.8%).
• skills/employment forecasts: large structural changes and high skills needs are forecasted for 2035;

• financial education

Sectors affected: Public services, Finance, Construction, Manufacturing

Necessary measures:

• stable funding for continuous training, with results-oriented approaches (incorporating certification, job placement, and wage growth);
• strengthening / quality assurance in professional training: standards, independent evaluation, public / transparent data on training providers and results;
• stimulating on-the-job training (apprenticeship, practice), with specific measures dedicated to adult training and employee training;
• Aligning training programs (PES programs, programs financed through EEP/NRRP) to "labour shortage / priority occupation lists" at regional/county level, updated semi-annually / annually (here the social partners can also be involved);

 

National Trade Union Bloc (BNS) strategic actions on this level:

• training for members and leaders (rights, occupational safety and health, digital, communication), plus partnerships with authorized training providers and employers for retraining and employment programs;
• promotion of training clauses in collective agreements (time paid for training, annual skills plan, certification);
• Participation in sectoral committees, initiatives related to occupational standards, social dialogue regarding skill development and in the interest of promoting vocational training;

• [for SME representatives in particular] How are the regulatory requirements for employee training applied in practice and how could these be improved? What benefits/support are available to companies investing in the upskilling of their employees (where possible by quantifying the number of companies benefitting from such incentives/support)? What other measures could be put forward to increase the private sector's role in upskilling efforts?

(from a trade union perspective, but also useful for SMEs): The obligation in the Labour Code exists* (but not accompanied by corrective measures in case of non-implementation) - in SMEs, however, it is often treated as a formality or ignored, especially when the pressure of collective bargaining or controls is lacking.

*The employer must ensure participation in training at their own expense, periodically, depending on the size of the company.

 

Necessary measures:

• simple tools for SMEs: standardised training packages, catalogue of accredited providers, regional platforms, consultancy support.
• alignment of training with the evolution of occupations and emerging technologies, not just general courses;
• predictable co-financing (state + employer) for certified training, with a Financial incentives for companies with a Collective Labour Agreement (CLA) or training committee in the company;

• incentives for training during working hours (paid training);
• quality-based conditions: public support only for programs that deliver recognized certifications, measurable skills and Include impact metrics;

3. Private equity

• Context: RO shows relatively low values for venture capital and private equity as a percentage of GDP.
• Could you provide an update on the ecosystem of Venture Capital (VC) and Private Equity (PE) funds domiciled in Romania?
• How wide is the investor base for VC and PE funds? What are the main hurdles to expand this investor bases e.g. to domestic institutional investors?
• How easy or burdensome is the authorisation procedure by the supervisory authority for VC and PE funds or VC fund of fund structures in Romania, as well as the marketing and pre-marketing procedures towards professional investors?
• What are your views on potential policy measures at national level to foster attractive exit options for VC and PE investors in start-ups?
• What are your views on potential policy options to support the direct or indirect involvement of institutional investors in start-up funding (e.g. by easing investment limits for institutional investors, to invest in the VC and PE asset class or have direct exposure to unlisted equity)?

No. We do not have such data, so we will provide just some general considerations:

 

1. The policy mix in Romania favours financial speculations, not venture capital investment and private equity. While keeping the interest rate differential (historically) – the highest in the EU, the venture capital is rewarded for taking no risk: borrowed capitals benefits from low interest rates in the EU to but the money at the highest interest in the EU (RO), while the exchange-rate is fully controlled. As a result, a 4-5% real revenue is factually guaranteed, with no risk, which is much rewarding instead of putting the money to work in an economy which has the perspective to increase long-term by 1% or 2% yearly.
2. Romania does not have a coherent and stable set of policy measures at the national level, while the depth and liquidity of local capital markets is
3. Such lack of policies failed to attract new companies/IPO on the Bucharest Stock Exchange
4. The lack of supervision from the Authority of Financial Supervision (ASF), manifested broadly on the insurance market supervision is an early warning indicator for the venture capital and private equity,
5. There is not a stable and predictable tax framework for the capital gain. In 2026, the capital gain taxation for holding and selling shares more than doubled comparing to 2025 (short term formerly 3%, long term – more than a year 1%, now 3% and 6%). Over certain levels, CAS is due.
6. Legal certainty is low while administrative burdens are high. Venture capital and private equity is not protected in real terms to insolvencies, market failures, etc.

4. Private pensions

• We understand that private pensions funds active in Romania are relatively small as percentage of GDP. In addition, they tend to invest more in bonds and less in equity than other EU countries. Moreover, this exposure to foreign assets is also low. Against this backdrop:
  • Do you consider regulatory requirements as a barrier for a more diversified and profitable portfolio? Which measures could change that behaviour?

Yes, they are a barrier for a more diversified and profitable portfolio. In our view, this is a “win-win” for the Romanian state and the private pensions administrators and a “lose-lose” for the future retires.

• As Romania has a demonstrated weak supervision of the capital markets through the oversight body/regulator ASF, people savings in Pillars 2 and 3 are rather protected by investing the most significant amount in government bonds
• The capital market in Romania is low and has no depth. Investing more on the internal market will rather artificially inflate on short term the portfolios
• The flow is like this: people pay mandatory contributions to Pillar 2 (which increased as percentage to 4.75% of the gross salary) -> and money are returned to the public budget as government bonds. This policy assures “comfort” for the Romanian state while it puts pressure on profitability of the retired persons portfolios – in times of high inflation

• How could pension funds contribute to channel funds towards private equity and venture capital?

Supervision. Supervision. Supervision.

• What could be done to increase the size and profitability of private pensions?

• Which are the main reasons for the slow uptake of occupational pensions in your view?

Lack of interest. Pillar 4 should be considered as an alternative to the “special pensions” system of the people in the judicial system, which will also increase the responsibility of the judges and prosecutors and won’t favour early retirement.

5. Quality of public administration, legislation & rule of law

• In your view, how transparent are Romania’s current decision-making processes, and what specific areas or stages (consultation, drafting, publication, implementation) would most benefit from increased openness or public participation?

Regarding institutional social dialogue within the Economic and Social Council (ESC) and various social dialogue commissions, a significant gap remains. While the framework is formally operational and legislative acts are regularly submitted for consultation, the process is often superficial. The persistent challenge is the lack of meaningful, substantive engagement rather than a merely procedural exercise.

The practice of providing insufficient time for stakeholders to review draft legislation persists. This is particularly problematic with complex, large-scale laws where social partners are sometimes given only a few hours to provide feedback. Such deadlines -frequently less than a single calendar day - make it impossible to formulate a well-considered or thorough response.

It is important to note that this practice is not universal and varies by case. Not every significant piece of legislation lacks proper consultation; indeed, some major laws have benefited from genuine and effective social dialogue. Nevertheless, a substantial number of large-scale, high-impact normative acts continue to be adopted without meaningful engagement with social partners.

• Legislative unpredictability is often raised as a concern by investors and businesses in Romania. What are your views on legislative predictability in 2025, including on the use of government emergency ordinances?

On a scale from 1 to 10 (1 being the lowest and 10 being the highest), the current legislative predictability is at almost “3”. The counterproductive use of government emergency ordinances has become more counterproductive (now the government assumes responsibility in Parliament, with no real debates and consultations for hundreds of changes, in the same time) – unjustifiably labelling this extreme unpredictability and ad-hoc measures as “reforms”.

A clear example is the use of "omnibus ordinances". These instruments simultaneously modify rights across multiple pieces of legislation, including organic laws, often to delay or postpone the implementation of specific provisions. Because these ordinances frequently introduce major fiscal reforms or changes to labour rights, the consultation process is typically a mere formality, with social partners receiving almost no time - or none at all - to provide feedback.

There is a widespread concern regarding the excessive use of Government Emergency Ordinances (GEOs) in Romania, often to regulate matters that the Constitution reserves for organic laws. These ordinances frequently bypass or substantially alter organic laws, impacting the core framework of labour rights and fiscal policy. Rather than addressing specific technical needs, these legislative acts implement structural changes to fundamental rights and obligations without the rigorous debate required for such significant shifts.

• Would you consider that the justice system in Romania is sufficiently digitalised? If not, what is lacking in your view (AI tools, electronic communication tools, use of videoconferencing, etc)?

The absence of real intent is the main reason. It is not understandable, in any way, why people cannot have full access at the electronic files, by email or cloud services.

Nevertheless, we can appreciate that some progress has been made in improving the interface between the judiciary and litigants. Parties can now submit legal documents via email and gain secure access to their entire electronic case file using a unique link and password provided with their subpoena. Furthermore, the public court portal allows anyone to track hearing dates, case progress, and summary rulings, ensuring a high level of transparency. The portal is public and accessible to any person interested in obtaining this information.

• Do you have experience with the use of digital tools in courts, for instance to submit documents (and if yes, what is your assessment of such tools)?

It is easy to submit electronic documents to an electronic file. It is hard to get access, electronically, to other documents submitted “on paper”. If you want to get copies from a specific file (cause), you have to submit a requirement, go to the “archive”, spend time physically in improper conditions, while not all the documents physically submitted are digitalised. The solution should be to digitalise all the physically documents in the moment of arriving. Anyway, some progress has been made.

For over a decade, the justice system has operated a dual filing system where electronic files exist alongside traditional physical ones. This setup requires the court to process documents in both formats - paper and electronic (via emails). Litigants can access the digital version of their records using credentials (user name and password) provided either via a subpoena or upon specific written request.

Newer digital tools are being integrated into the judicial workflow, such as the ongoing implementation of the Ghiseul.ro platform for online document submission. Furthermore, the "ReJust" application has been introduced to streamline the drafting of legal documents by providing standardized templates for judges and clerks. This tool also facilitates the entry of statistical data into ECRIS, the judiciary's core information management program, which has been the operational standard in courts since 2006.

The system now allows the possibility of electronic communication of procedural acts, including court decisions, provided that the parties involved designate an email address for this purpose. Additionally, judicial efficiency has been enhanced by the introduction of specialized digital applications for the online payment of court fees (judicial stamp duties).

Judicial and prosecutorial authorities now have direct access to national civil registries. Authorized personnel can retrieve population data in real-time using secure credentials (user name and password), provided the information is required for a specific case file.

Plans are currently underway to roll out an updated version of the ECRIS system. This next-generation platform is designed to serve as a centralized hub, fully integrating the various judicial applications currently in use into a single interface.

While the digitalization process is well underway, several persistent challenges remain. The following issues continue to hinder the full effectiveness of the system:

1.The hardware across many courts and prosecutor’s offices - including computers, printers, and other essential equipment - is largely obsolete. This outdated infrastructure is compounded by inadequate network capabilities; many judicial facilities still fail to provide staff with unrestricted internet access.

2. A secondary barrier is the limited digital literacy among the general population, which restricts litigants' ability to use the justice system’s new digital tools. This issue is compounded by the absence of a structured national initiative to improve citizens' digital competencies, which is essential for the widespread adoption of digitalized public services.

• What are the sectors that you consider most at risk to corruption (e.g. defence, agriculture, public procurement, etc.)?

Regarding sectors with a risk of corruption, there are several areas of the economy characterized by systemic corruption.

• Although a national law governs offset compensatory mechanisms in the defence sector, it has not been applied for over two decades. Consequently, military technology acquisitions totalling tens of billions of euros have bypassed these legal requirements. This persistent failure to implement offset provisions has deprived the national economy of billions of euros in potential direct investment and vital technology transfers.

Furthermore, a procedural trend has emerged that bypasses standard public procurement laws. The Ministry of National Defence (MoD) and the Ministry of Internal Affairs (MoI) frequently submit Government Decisions that outline highly specific requirements for new technology. In practice, these decisions describe the desired product and its manufacturer in such detail that they effectively select a specific supplier without explicitly naming them.

Following the Government Decision, the respective ministries draft a law that mirrors the specific conditions previously set by the administrative act. This draft is then sent to the Parliament for approval. This process effectively insulates the decision from legal challenge; according to the Constitutional Court jurisprudence, lawmakers cannot be held legally liable for the votes they cast during their mandate, thereby closing the cycle of accountability.

• Agriculture remains a sector severely impacted by tax evasion and systemic fraud. Historically, the subsidies provided to this sector - from both national and EU sources - have failed to generate a proportionate return to the general consolidated budget. A comprehensive structural analysis of the Romanian agricultural sector is necessary, as the substantial public investments made have not translated into the expected level of fiscal revenue.
• Platform work. In the absence of a dedicated legislative framework, the platform economy has become a significant source of tax evasion and fraud. With over 200,000 active platform workers in Romania, the lack of regulation has a substantial negative impact on the general consolidated budget, as revenues from this labour sector remain largely uncaptured.
• Public procurement.
• Public state guarantees through state owned banks with no “real case” (case of Blue Air, Liberty Steel Galați, etc.)

We have frequently pointed out the legislative loopholes that allow for the subcontracting of the core activities of economic operators participating in procurement procedures. This gap has enabled the rise of "shell companies" - entities lacking employees, technology, or genuine operational capacity, but often possessing political ties. These companies constantly win major tenders only to subcontract the work through multiple tiers, sometimes reaching five or six levels deep. As each subcontractor extracts a profit margin, the remaining budget is so depleted that the final work is often performed using illegal labour and substandard materials. This inevitably results in project delays, poor quality, and loss of the non-reimbursable (EU) funding.

Despite the provisions of Law no. 283/2024, which transposed the EU Directive on adequate minimum wages, the required administrative updates remain unfulfilled. While the law mandates a revamped public procurement framework - including standardized documents, manuals, and operational guides to ensure labour compliance - no concrete measures have been adopted. This inaction leaves the procurement system without the necessary tools to monitor and enforce fair labour practices among economic operators.

• Do you view corruption as a particular obstacle for business and investments (domestic/ foreign)? Does corruption impact on the overall productivity?

Yes, we do. When bribes replace competition, companies cannot compete on merit. Companies who play by the rules are shut down: jobs, investment, and opportunities are lost. Competition is also lost in terms of public (discretionary) procurement. “Goods and services” paid by the state budget in 2025 came with a higher bill.

• How will the recently revised lobbying legislation impact the integrity of doing business?

In our view, the main engine for deteriorating the integrity of doing business is mainly a weak judicial system and corruption.

The existing legislative framework is far from clear, coherent, or effectively enforceable. In practice, lobbying mechanisms are often distorted and used as vehicles for influence peddling, thereby exacerbating the phenomenon of corruption. Regarding lobbying activities, Romania’s regulatory framework remains insufficient, fragmented, and superficial; it is incapable of ensuring transparency or establishing a clear distinction between the legitimate representation of interests and the unlawful influencing of public decision-making

• What is your assessment of the effectiveness of the public procurement system, in particular regarding anti-corruption safeguards, transparency, independence and accountability? How do you assess these risks at the local level?

We consider that an increase in the effectiveness of the public procurement system should go in tandem with the decrease of the VAT gap. Financing from national budgetary resources is “more friendly” for companies that “make the rule” for the public procurement, comparing with EU funds, and government tends to keep this “friendly”, uncompetitive environment. Our assessment is on the “weak side” of the effectiveness.

Currently, there is no real accountability:

• Not for the judicial system
• Not for government, in terms of respecting the provisions of the law (ex: the continuous freeze in minimum wages, multiple budgetary rectifications, the obligation to have an annual budget in place at the beginning of the year, etc)

Bucharest, 20 January 2026

N.B. More analyses and research studies you can find on the BNS website, under the chapter ‘Studii’ at www.bns.ro