Nova TV, 4 August 2025
The measures taken by the Bolojan government to reduce the budget deficit, which came into force on 1 August 2025, have attracted considerable media attention in Bulgaria. One of the interviews given by the founder of the blog The Bridge of Friendship in early August 2025 was broadcast by the television station “Nova.” Below is a transcript of the interview.
You can watch the interview video with English subtitles.
Presenter:
Tell us, what exactly is going on? Is it an exaggeration to talk about a price shock in Romania at this point?
Vladimir Mitev:
In recent days, various television stations have commented that Romania is entering an increasingly difficult stage of its economic development because it has to cope with an excessive budget deficit, which creates a risk of state bankruptcy. If its credit rating is downgraded to junk status, this will cause serious problems. The interest rates at which it is currently financing its debt are too high. For now, this risk has been avoided, and analysts commenting on the situation are trying to send out positive messages. They say that the difficulties will continue for a while, probably until the end of next year, but in their opinion, Romanian society will have difficulty overcoming them.
In any case, the measures that came into force on 1 August 2025, are only the first. Similar measures are expected to be taken by the end of the year. The goal is to increase revenues and reduce expenditures. Even now, there is an increase in budget revenues, but expenditures continue to rise, even at a faster pace. In other words, the problem of imbalances continues to exist.
Moderator:
What price is Romanian society paying for the mistakes of politicians? What is happening now?
Yesterday, by the way, I saw a Romanian buying ten packs of cigarettes at a gas station in Bulgaria… I guess it’s because of the higher excise taxes in Romania. Or maybe he suddenly liked a different brand of cigarettes.
What is happening with prices? I have also seen an increase in fuel prices, and that leads to everything else.
Vladimir Mitev:
Yes, excise duties on fuel, alcoholic beverages, and other products are also rising. The fact that Romanians come to Bulgaria to buy cigarettes is nothing new—there has been a kind of “excise duty tourism” for a long time. This is frequently observed, especially in the areas around the Friendship Bridge in Ruse.
The reason is that excise duties on cigarettes in Bulgaria have long been – and I believe still are – among the lowest in the European Union.
Moderator:
And their excise duties are already 10% higher since 1 August 2025, aren’t they? We can also see diesel in the graph…
Presenter:
Okay, but what increase is generally expected as a result of these measures? Has there been any reaction? I have seen that some retail chains have frozen their prices for August. Is that true?
Vladimir Mitev:
Yes, such information is appearing in the Romanian press, although it is contradictory. For some products, increases exceeding the 2% VAT increase are being announced. For example, it is said that electricity has become more expensive since 1 July 2025.
Of course, excise duties lead to additional increases. In reality, for some products, the increase is higher than 2%, which for food products should have been a few Romanian lei – something insignificant.
On the other hand, Romania’s economic model is largely based on consumption, not only on exports. It should perhaps be mentioned here that Bulgaria relies more on industrial exports, but Romania also has such a sector. However, wages have been rising there for years to stimulate domestic consumption. You mentioned lower VAT rates for food products – these were introduced about 10 years ago and were both an economic and a social measure.
That is why we are now seeing these promotions – it is not exactly a “price freeze,” but rather marketing campaigns aimed at maintaining consumption levels.
Moderator:
We discussed consumption here with the trade union representatives. Until recently, we used Romania as a positive example – how many more products you can buy there on the minimum wage compared to Bulgaria.
Obviously, now their purchasing power will also decline.
How is the public debate going at the moment, in your opinion? Are people blaming previous governments for the flawed budget or are they blaming the current government, which is obviously obliged to introduce these measures?
In my opinion, there are both attitudes. On the one hand, former Prime Minister Marcel Ciolacu is being accused – including on the political stage – of allowing Romania’s finances to get into this situation. On the other hand, a large part of the population believes that the current government is not distributing the burden of the measures fairly.
Businesses and certain social groups close to the government seem to bear less of the burden, while public sector employees and wage earners are paying a higher price. That is why we are seeing numerous protests, which took place last week and in recent months.
At the beginning of the year, the protests were mostly political, organized by the so-called sovereignists, the AUR party. Now, however, different social groups are taking to the streets, mainly public sector employees.
There is tension because different groups are losing certain rights or privileges. There is also a fight against so-called “special pensions” – for example, those received by judges after retirement. These pensions are quite high, and although there are no plans to cut them drastically, the government is still trying to reduce them partially. Because if the blow falls only on people without privileges, there will be strong social discontent.
Presenter:
If they do this, they will create even more social tensions. Okay, thank you, Mr. Mitev. We are talking about Romania, but we are always thinking about Bulgaria, with its ever-increasing spending…
Perhaps the difference is that we are on the verge of joining the eurozone, something that Romania, at least at this point, seems quite far from.
Photo: Increase in excise duties on gasoline and diesel fuel in Romania (source: YouTube)
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