After S&P: Romania, where to?

There is a kind of survival that resembles victory. The student who manages to achieve a passing average after a year of poor grades, the patient who leaves the hospital with a long list of prohibitions, the driver who made it through the intersection in the last fraction of a second of the yellow light, with the horns still echoing in his ears and his hands clenched around the wheel, the castaway pulled onto the sand after an entire night clinging to a plank, only now seeing how far he is from home… Romania has just experienced something like that. Three rating agencies – Fitch, Moody’s and, most recently, S&P – put us through the sieve one after another and reached the same verdict: they still maintain the country rating recommended for investors. Junk, that word that sounds like a sentence, has once again remained merely a threat for the future.

It is fairly good news, and it would be unfair to say it in a funereal tone. In a year in which the country operated with a government with limited powers, S&P observed that the recovery trajectory had been maintained. The main positive factor was the decline in the budget deficit during the first eight months of the year compared with last year, demonstrating the first results in the fiscal consolidation process. The agency estimates that the deficit will fall toward 6.25% of GDP. At the same time, according to S&P, the government has made progress with legislation to unlock most of the funds from the Recovery and Resilience Facility, namely the PNRR. These developments led to a peak in European fund inflows this year, supporting an exceptionally high budget for public investment, amounting to 8.5% of GDP, with absorption rates exceeding 90% for grants and 95% for loans. S&P estimates European fund inflows at approximately 3.5% of GDP in 2026, helping cover a significant portion of Romania’s high external financing requirements, while providing the fiscal breathing room needed to implement public-sector investments, which represent the main support for economic activity this year. The figures are not poetry, but they are evidence. The state tightened its belt without collapsing. For now.

Only passing grades always come with notes in the school record, and the agencies’ notes are written emphatically. They do not speak of a deficit in mathematics, but of one in stability. Romania’s economy is not judged only by what it has done, but by what it might do in the absence of a firm hand at the helm. S&P could downgrade Romania’s rating if the prolonged process of forming a government prevents the reduction of the fiscal deficit in 2027 and 2028. The agency sees the risk that “failure to implement a credible fiscal trajectory and policies” would not only jeopardize budget consolidation, but could also increase overall risks, such as deteriorating investor confidence, higher financing costs, and intensified pressure on the balance of payments. Because investors do not read only balance sheets; they also read political calendars.

And the uncomfortable truth is this: the rating was saved in spite of politics, not thanks to it. The real economy, citizens and large and small companies, together with the administrative apparatus, technocrats, and ministries that continued doing their jobs, have supported a country whose political roof is shaking from its foundations. Such an effort cannot last indefinitely. Not even the best team can play forever without a coach.

And yet, starting Monday, October 5, a window of opportunity is opening again: new consultations are beginning for a possible government, following the failure of all nominations made so far by President Nicușor Dan. A new beginning, optimists say. Yet another round in a game of chess in which no one wants to move the first piece, skeptics say. The truth is, as usual, somewhere in the middle, but we cannot afford the luxury of searching for it for too long.

For now, Romania has received some more credit in the eyes of the markets, but how much of that credit can still be squandered? Interest rates will not wait for the consultations. In just eight months, the state paid 42 billion lei (approximately 8.4 billion euros) solely in interest on debts from previous years. This is the bill for a spendthrift past, arriving mercilessly, regardless of who does or does not occupy Victoria Palace. Every month of deadlock means money we give to creditors instead of using it to build schools, hospitals, and roads.

There is, however, a danger subtler than deadlock, and S&P names it with diplomatic precision: the risk of “suboptimal public-policy compromises adopted at the last minute.” Translated into the language we all speak: a half-measure solution, hastily made under pressure from the clock. A coalition improvised overnight, with promises divided up at Parliament’s buffet, just so we can say that we have a government. A government for the sake of having a government is like a house built on the eve of an inspection: it looks good on paper and floods at the first rain.

The answer to “Romania, where to?” cannot, therefore, be a slogan. It must be discipline. First: the right direction must be maintained, and this means continued budget consolidation, not abandoning it at populist pace at the first electoral pressure. Second: investments and European funds must be protected from any interruption, because it has been demonstrated that they are the only engine capable of getting us out of the dilemma of growth through debt. Third, perhaps the hardest: a promise of restraint. The future government, whatever its structure, composition, and political color, must build exclusively on sound foundations and spend only what it has.

It is not a spectacular program. It has no fanfare, no ribbon-cutting ceremonies, and brings no easy votes. This is where the frustration of populists from all parties will grow. But this is precisely where the test of maturity for the entire political class lies: the ability to choose the boring option that saves us over the spectacular one that ruins us.