The Romanian government under Prime Minister Ilie Bolojan has introduced a comprehensive austerity and fiscal reform package aimed at reducing the national budget deficit and avoiding a severe recession. Key measures include increasing the value-added tax (VAT) from 19% to two tiers of 11% and 21%, raising the tax on dividends from 10% to 16%, and implementing an additional tax on banking activities. The government plans to depoliticize the National Agency for Fiscal Administration (ANAF), reorganize it, and reduce the public sector workforce by approximately 20-30%, with some government employees required to pass competitive exams to retain their positions. Salaries and pensions are to remain capped in 2026, with no increases planned. The government is also targeting state-owned companies, including CFR Călători and Metrorex, criticizing their heavy reliance on subsidies. Discussions have taken place with trade unions and economic stakeholders to negotiate the reforms, which are described as necessary but unpopular and intended for a limited period. The government has assumed responsibility for the austerity plan in Parliament, with opposition parties like AUR challenging it legally and politically. The European Commission has requested cuts in government investments, while Romania, along with four other EU countries, opposes a new EU-Ukraine trade agreement over concerns about agricultural market destabilization. The government is also preparing a second legislative reform package addressing ANAF, state companies, the banking sector, healthcare, and local administration. The fiscal changes are expected to lead to higher prices for consumer goods such as clothing, footwear, and electronics starting August 1. Prime Minister Bolojan has emphasized the urgency of these reforms, warning that failure to implement them could result in a deep economic crisis and political instability within his party, the National Liberal Party (PNL), which recently held a contentious congress. Meetings with Standard & Poor's rating agency have been held to discuss the fiscal measures. Amendments proposed by the Social Democratic Party (PSD) have been accepted on certain social contributions. The government has also announced plans to address special pensions, including the removal of retirement indemnities for Constitutional Court judges under a new bill.