Romania has completed 24 of the 25 committee reviews required to join the Organisation for Economic Co-operation and Development (OECD). One hurdle remains. And yet the central argument against its membership — that its budget deficit is too high — sits awkwardly alongside the fiscal records of the club it is trying to enter.
The United States, a founding OECD member, ran a general government fiscal deficit of 8 per cent of gross domestic product in 2023, with public debt at its highest level since the Second World War. France posted a deficit of 5.8 per cent of GDP in 2024, compared with an OECD average of 4.6 per cent in 2023. Romania’s deficit of 9.3 per cent in 2024 is higher than both. But the gap is narrower than it looks — and the comparison raises an uncomfortable question about what OECD membership is actually meant to signal.
THE NUMBER AND WHAT LIES BENEATH IT
Romania’s deficit is the highest in the EU. That much is not in dispute. Despite having been under the EU’s Excessive Deficit Procedure since 2020, government deficits have remained persistently high, significantly exceeding the 3 per cent Maastricht threshold throughout that period.
The 2024 spike reflected large increases in public sector wages, higher pension spending following a September 2024 recalculation of pension rights, and domestically financed capital spending. In short, it was a political choice — made during an election year and financed by borrowing.
What distinguishes Romania from high-deficit OECD members is not the number alone but what produced it, and whether the institutions exist to correct it. The United States runs large deficits within a framework of deep capital markets, independent institutions and decades of established credibility. France does the same, albeit uncomfortably. Romania has none of that institutional ballast — and the OECD knows it.
Public debt, though still relatively low by OECD standards, has risen 20 percentage points since before the pandemic, reaching 55 per cent of GDP in 2024 and continuing on an upward trajectory. The direction of travel matters as much as the current level.
THE REFORM GOVERNMENT
Prime Minister Ilie Bolojan took office following a turbulent 2025 that included a cancelled presidential election amid suspicions of Russian interference. He inherited an economy slipping into a technical recession and a fiscal position that had deteriorated faster than any other EU member state.
His government moved quickly. A nominal freeze on public wages and pensions was extended through 2026. Value added tax was raised. Health contribution bases were broadened. Excise duties went up.
Bolojan told the OECD’s annual survey launch in Bucharest in March that Romania had ended 2025 with a deficit of 7.7 per cent of GDP, below the 8.4 per cent estimated by the European Commission, and that the 2026 budget targets a deficit of 6.2 per cent. He has rejected the word “austerity”, insisting the measures represent fiscal responsibility.
OECD Secretary-General Mathias Cormann, who presented the survey alongside Bolojan, said significant progress had been recorded over the past six months, particularly on fiscal, anti-corruption and economic issues, and praised the commitment shown by Romanian leaders across party lines.
WHAT THE OECD IS ACTUALLY TESTING
OECD membership confers no funds, no security guarantees and no legal framework. Its value is reputational — a signal to investors and creditors that a country’s institutions function, its data are reliable and its policy course is sustainable. For Romania, still paying some of the EU’s highest borrowing costs, that signal could ease financing conditions at a moment when it needs them most.
But the test is not whether Romania’s deficit matches those of France or the United States. It is whether Romania has demonstrated the institutional capacity to bring it down credibly and durably.
If fiscal imbalances are not adequately addressed beyond 2026, rating agencies may downgrade sovereign debt, which could significantly raise borrowing costs and reduce access to international capital markets. That threat does not hang over Washington or Paris in the same way.
The OECD’s own survey, published in March, acknowledges that planned consolidation measures for 2025 and 2026 mark important steps forward but remain insufficient to place public debt on a firmly downward trajectory. Further efforts will be required well beyond the accession date.
THE LAST DOOR
One committee review remains. Romanian officials are confident it will be completed before the end of this year.
The accession process itself has delivered some of what membership promises. Committee reviews have pushed through changes to the business environment, anti-corruption frameworks and pension rules that might otherwise have stalled. In that sense, the journey has been as important as the destination.
The OECD projects GDP growth of 1 per cent this year, rising to 2.2 per cent in 2027 as the pace of fiscal consolidation eases and private investment recovers. The economic outlook is improving, if fragile.
Romania is not the first country to seek OECD membership while running a large deficit. It will not be the last. The question the remaining committee must answer is not whether Romania’s finances are perfect — no member’s are — but whether its institutions are ready to manage them honestly.
