Romania will back Nato’s increased spending goal even as it starts to cut its own record public deficit, the country’s new president Nicușor Dan has said, seeking to reassure foreign partners and investors about his country’s pro-western orientation.
Dan’s election victory on Sunday capped six months of political and economic turmoil prompted by a presidential election being cancelled because of alleged Russian meddling.
In an interview with the Financial Times, Dan said his country had made a clear choice as an EU and Nato member and committed Ukraine ally by voting him into office and not his anti-Ukrainian, Eurosceptic rival George Simion, who had topped the first-round vote.
“We will remain part of the European effort to help Ukraine obtain the most reasonable peace,” Dan said ahead of taking over from the interim president on Thursday. “That means continuing to support Ukraine and participate in the European effort to take its security into our own hands.”
He said Romania was willing to increase its defence spending and meet a new Nato goal of 3.5 per cent of GDP, with an additional 1.5 per cent for infrastructure and cyber security proposed by the defence organisation’s secretary-general Mark Rutte and endorsed by German Chancellor Friedrich Merz.
The target is likely to be agreed by Nato leaders at a summit next month after US President Donald Trump threatened to withdraw American security guarantees unless allies spent as much as 5 per cent of GDP for their own security, up from Nato’s current goal of 2 per cent.
“Yes, it’s something I support,” Dan said, adding that the timeline of defence spending increases will be negotiated with the US and the other allies. “We will be aligned,” he added.
His pledge to increase defence spending comes at a delicate moment for Romania, where successive governments had allowed the budget deficit to balloon to 9.3 per cent of GDP by last year, the highest in the EU.
Even as the European Commission is allowing defence spending to be exempt from the bloc’s fiscal rules, Bucharest is under pressure to curb other expenditures — an unpopular task for Dan’s incoming administration. Brussels has threatened to escalate its so-called excessive deficit procedure on June 4 and even suspend EU funds if the new government does not present credible plans for how it will reduce the deficit.
Dan, a mathematician by training, said it was “realistic” to aim for a budget deficit of 7.5 per cent of GDP this year. “We’ll have to cut expenses by €6bn this year. I think we can do that . . . I want to be involved in the discussions,” he said, adding that a new government was likely to take shape within a month.
His pitch to investors and the EU will be to look at his record as Bucharest mayor and “have some confidence in our new plan”. When he started, immediate debt payments totalled 75 per cent of the annual budget, but he moved the city to a stable balance sheet and a premium debt rating within four years.
Dan’s most pressing task is to appoint a prime minister who can form a coalition government able to pass the reforms needed to bring the economy back on track.
“I want to balance the state budget and give free space to private initiative, but we first have to have all four [mainstream] parties in the government,” he said. Early negotiations to form a parliamentary majority are already under way, but it remains unclear whether the biggest party, the Social Democrats (PSD), will remain in government or join Simion’s far-right AUR party in opposition.
Dan said he was seeking to appoint a premier with a solid majority behind him, because his country could not afford any political “games” at this stage. Ilie Bolojan, a centre-right senator who served as interim president until Thursday, is tipped to be Dan’s favourite, but the other parties will have to agree.
Dan acknowledged that his and the new government’s performance will be central to preventing the far right from winning the next parliamentary election in 2028.
“I understand the 5mn voters” who backed Simion, he said. “Their reasons are not ideological, but economic and social.”
Romania’s currency, the leu, dropped sharply against the euro when Simion won the first round and the government struggled to borrow on international markets. Credit rating agencies said the country was just one notch above “junk” status.
“We have to admit the Romanian state promised a lot of things it didn’t fulfil,” he said.
Corruption, mismanagement and a widening wealth gap all contributed to that anger against the political establishment, he said. “A lot of politicians of the old parties . . . understand that they have to change.”
Dan also called for more investigations into Russia’s suspected meddling in the cancelled first-round vote in November, won by a previously fringe politician, Călin Georgescu.
“The next step will be the justice system. Part of the reason why 5mn people voted for the far right was the lack of explanation about the November election.”
