Beginning of the Geto-Dacian year: stolen treasure in Holland, first day in full Schengen

The disappearance of the Dacian treasure, following a burglary on the last day it was still on display at the Drents Museum in the Netherlands, represents the main event of the first month of 2025, despite the Government's attempts to keep the economy and public finances on the right track, in order to rebalance the situation at the national level. While Prime Minister Marcel Ciolacu, Minister of Finance - Tanczos Barna and the other members of the Cabinet were approaching the finalization of the draft law on the state budget and the state social security budget, on January 25 we were announced that we had lost, probably permanently, the famous golden helmet from Coţofeneşti and three Dacian bracelets, from the treasure sent last year by the National Museum of History of Romania to an exhibition in the Netherlands. The robbery was possible due to the lack of security at this important objective for our national history, and the event left with accusations on both sides, with joint Romanian-Dutch investigation teams arresting suspects, but not finding any trace of the Dacian helmet and bracelets, but also with the dismissal of the director of the MNIR, Ernest Oberlander-Târnoveanu.

The above event practically canceled the joy of our country's entry, fully, that is, including land borders, into the Schengen area from January 1, 2025, but also the announcement made on January 10 by the US regarding Romania's admission to the Visa Waiver Program, which allows Romanian citizens to travel without a visa to the United States for a period of up to 90 days. This decision came as a result of sustained diplomatic efforts and the reduction of the visa refusal rate below the 3% threshold, reaching 2.61% at the end of September 2024.

Domestically, the Romanian Government adopted the necessary legislative framework for the reorganization of the presidential elections, setting the election date for May 4, 2025, and May 18 for the second round. Through these normative acts, the Executive imposed stricter measures for the financing and transparency of electoral campaigns, and the allowances for the election organizers were reduced by 25% compared to the previous election.

In addition to these decisions, the Government continued the policy of allocating budgetary resources to finance public investments at the national level, but also at the local level, in the absence of the necessary revenues for the state budget. However, in order to have the desired funds, the Ministry of Finance proposed, and the Executive approved, that the "Medium Term Notes" government bond issuance program be increased from 75 billion euros to 90 billion euros in order to ensure financing for the years 2025 and 2026.

Budget expenditures higher than revenues have left their mark on budget execution, which at the end of January shows a deficit of 0.58% of Gross Domestic Product, given that at the end of 2026 the deficit must fall within the maximum limit of 7% according to the draft state budget law debated by the Government on January 31 and approved on February 1.

In view of this situation, the Board of Directors of the National Bank of Romania decided on January 15 to maintain the monetary policy interest rate at 6.5% per year, maintain the interest rate for the lending facility (Lombard) at 7.5% per year and the interest rate on the deposit facility at 5.5% per year.

• Acute need for financing since the first month of the year

During January, the Government approved a series of major infrastructure projects, including the following: the Răstoliţa hydropower development (200 million euros, Hidroelectrica investment), which received the environmental consent in November 2024; the construction of the first part of the Buzău-Brăila-Galaţi expressway, more precisely the Brăila-Galaţi bypass section (812 million lei), intended to improve regional connectivity; modernization of the roads between Galaţi and Hanu Conachi (1.85 billion lei, EU funding), including the rehabilitation of 40 km of road and 12 bridges; construction of the Pantelimon road junction (A0 - Km 48), a project worth 175 million lei, to streamline traffic on the Bucharest Ring Road.

In addition, the authorities announced the allocation of 5.6 million lei for compensation related to the expropriations necessary for the Răstoliţa Hydropower Development, a strategic project in the energy field.

At the same time, the Executive approved the financing of the Hot Meal program, which will benefit over 500,000 students and preschoolers from 1,462 educational institutions.

Due to the acute need to finance public spending, the Government decided on January 10 to modify the framework program for issuing government securities "Medium Term Notes", by increasing it from 75 billion euros to 90 billion euros. The executive motivated the decision in terms of the need to cover the need for financing through Eurobond issuances on international capital markets in 2025 and 2026, as well as the conduct of early refinancing operations. The "Medium Term Notes" (MTN) program is a facility through which the Ministry of Finance collaborates with financial institutions to launch periodic bond issuances on foreign markets.

"In the context of financing needs in 2025, Eurobond issuances worth approximately 13 billion euros are estimated. At the same time, Eurobonds worth approximately 2 billion euros will mature during this year. The purpose of this measure is to ensure a flexible and efficient framework for public debt management and to protect public finances from possible external shocks that could affect financing costs. The Ministry of Finance will continue to finance public debt by issuing government bonds on international capital markets, in order to maintain and consolidate the foreign exchange financial reserve. The aim is to ensure sufficient coverage for the gross financing needs and prevent possible external shocks that could affect the financing and refinancing costs of the public debt", states the press release issued by the Government after approving the amendment to the respective maximum ceiling.

Immediately after the approval of this amendment, the Ministry of Finance launched on January 13 a new issue of Treasury government bonds, with maturities of 1, 3 and 5 years, with annual interest rates of 7%, 7.5% and, respectively, 7.8%. The respective bonds could be purchased from January 13 to February 6.

Read January in numbers

• Budget deficit of 11 billion lei at the end of January, although less was spent on investments

The lack of revenues to the state budget in the first month of the current year was reflected in the budget execution for last month, which shows us a deficit of 0.58% of the Gross Domestic Product.

According to the execution of the general consolidated budget for January 2025 published on the website of the Ministry of Finance, the first month of the year ended with a deficit of 11.01 billion lei (0.58% of GDP), up from 0.45% of GDP in January 2024. Total revenues decreased by 1.4% (year-on-year), reaching 46.75 billion lei, while expenditures increased by 4.5%, reaching 57.76 billion lei.

The decrease in VAT receipts (-11.9%) and the reduction in European funds (-59% year-on-year) were the main reasons for the decrease in revenues. In contrast, the tax on wages and income increased significantly (+62.4%), and excise revenues decreased by 20.1% due to the decrease in sales of tobacco products (-36.8%).

Budget execution shows that public spending increased by 4.5%, reaching 57.76 billion lei at the end of January. Of the total public spending, personnel spending amounted to 14.01 billion lei, up 18.6% compared to the same period of the previous year, spending on goods and services was 7.38 billion lei, up 3.9% compared to January 2024, while spending on social assistance was 22.3 billion lei, up 12.8% compared to the same period of last year. same period of the previous year. An increase is reflected in the budget of the National Single Health Insurance Fund, of 18.7%, for the settlement of medicines with and without personal contribution and medicines used in national health programs.

Interest expenses also registered an increase of 2.19 billion lei compared to January 2024, standing at 3.84 billion lei at the end of the first month of this year.

The only areas where the Government cut money in the first month of the year were expenses related to projects financed from non-reimbursable external funds (including subsidies from the European Union related to agriculture) and expenses for investments from domestic sources. For projects financed from non-reimbursable external funds, the Government allocated only 2.49 billion lei in January 2025, down 44.8% compared to January 2024. Regarding investment expenditures, which include capital expenditures, as well as those related to development programs financed from domestic and foreign sources, they were 5.3 billion lei in the first month of 2025, 28.15% lower than in January 2024, when they were worth 7.37 billion lei.

• BNR maintains the monetary policy interest rate level

In these macro-financial conditions, in the meeting of the Board of Directors of the National Bank of Romania on January 15, it was decided to maintain the monetary policy interest rate at 6.5% per year, to maintain the interest rate for the lending facility (Lombard) at 7.5% per year and the interest rate on the deposit facility at 5.5% per year.

The decision comes in an economic context marked by an increase in inflation in the last months of 2024, but also by a stagnation of economic activity in the third quarter of last year. According to the central bank, the decision is motivated, among other things, by the fact that the annual inflation rate continued to increase above anticipated levels, reaching 5.14% in December 2024, compared to 4.62% in September. This increase was mainly driven by higher fuel prices, following the appreciation of the US dollar on international financial markets. Food prices were also influenced by the effects of the severe drought in the summer of 2024 and by the increase in the prices of some basic commodities.

Another relevant indicator, the adjusted CORE2 annual inflation rate, stagnated at 5.6% in the fourth quarter of 2024, after a previous downward trend. This stabilization was the result of contradictory influences, including disinflationary base effects on some non-food subcomponents and the increase in wage costs, which were partially passed on to consumer prices.

The NBR also shows that the Romanian economy stagnated in the third quarter of 2024, after a marginal growth of 0.1% in the second quarter. On the other hand, compared to the same period of the previous year, GDP advanced by 1.2%, exceeding the 0.9% growth in the previous quarter. Household consumption continued to be a driver of economic growth, although it decreased slightly compared to the previous quarter. In contrast, investments (gross fixed capital formation) recorded a sharp decline, reaching a minimum of the last nine quarters. Net exports significantly reduced the contractionary impact on the economy, due to the more pronounced decrease in imports. This contributed to moderating the increase in the trade and current account deficits, although overall the external balance situation remains fragile.

In the analysis made as part of the decision, the central bank also shows that the number of employees increased in the last months of 2024, while the ILO unemployment rate decreased to 5.3% in November, compared to 5.6% in the third quarter, but the cost of labor remained high, with an 18.6% increase in the unit labor cost in industry.

The NBR estimates a decrease in inflation in the first months of 2025, but on a higher trajectory than initially anticipated. This decline will be supported by favorable base effects and a moderation in the increase in import prices. However, risks related to the evolution of food and energy prices, weather conditions and geopolitical tensions persist, as well as from the implementation of the new fiscal consolidation package adopted by the Government at the end of last year. Also, the absorption of European funds remains essential for maintaining macroeconomic stability and financing structural reforms.

• ECOFIN, agrees with the 7-year recovery plan

Following the NBR's decision, on 21 January, the Economic and Financial Affairs Council (ECOFIN) of the European Union adopted recommendations on medium-term budgetary and structural plans for 20 member states, including Romania. These recommendations target essential measures for fiscal consolidation and reducing the budget deficit within the framework of the excessive deficit procedure. ECOFIN approved our budgetary adjustment path over a seven-year period, in line with the requirements set out in the EU Regulation on economic governance (2024/1263). One of the main objectives of the adopted budgetary and structural plan is to reduce the budget deficit below the 3% of GDP threshold in the period 2025-2031, thus creating the necessary premises for the sustainability of public finances. Currently, Romania is among the member states with the highest level of public investment, exceeding 7% of GDP. ECOFIN recommendations for our country include maintaining public spending within the established limits, with the annual ceiling for their growth to be 5.1% in 2025, 4.9% in 2026, 4.7% in 2027, 4.3% in 2028, 4.2% in 2029 and 3.9% in 2030. It is expected that Romania will manage to complete this procedure by 2030.

The adoption of these recommendations allows for the maintenance of a sustainable development and investment trajectory. After the ECOFIN meeting, the government transposed the measures into the annual budget draft, which it debated in the meeting of January 31 and approved on February 1.

According to the draft budget that was approved by the Executive and subsequently adopted by the Parliament, the forecasted economic growth is 2.5%, and the Gross Domestic Product is estimated at 1,912.6 billion lei, with a deflator of 5.8%. The average monthly net salary is forecast to increase by 6.1%, including the increase in the gross minimum wage from January 1, 2025. The average number of employees will maintain its upward trend, registering an increase of 1.2% in 2025 compared to the previous year, exceeding the level of 2019 by over 300,000 people. Inflation, respectively the increase in the consumer price index, will follow a decreasing pace, being estimated at 3.8% at the end of the year and an average rate of annual growth of 4.4%, and the budget deficit will follow a decreasing trend, falling within the target of 7% of GDP.

As for the general consolidated budget expenditures, these are estimated at 802.2 billion lei, respectively 41.9% of GDP for 2025, compared to 727.3 billion lei, respectively 41.2% of GDP in 2024, with an increase of 0.7 percentage points, determined by projects financed from non-reimbursable external funds. Personnel expenses are 169.5 billion lei, respectively 8.9% of GDP for 2025, compared to 164.6 billion lei, respectively 9.3% of GDP for 2024, recording a decrease of 0.4 percentage points as a share in GDP. Expenditures on goods and services are 94.7 billion lei, or 5.0% of GDP in 2025, compared to 93.7 billion lei, or 5.3% of GDP in 2024, with a decrease of 0.3 percentage points. Expenditures on social assistance are estimated at 242.3 billion lei in 2025, compared to 223.9 billion lei in 2024, remaining at 12.7% of GDP, of which pension expenditures are 182.7 billion lei, or 9.6% of GDP. Investment expenditures are expected to reach a record level in 2025 - 150.5 billion lei, or 7.9% of GDP, compared to 118.8 billion lei, or 6.7% of GDP in 2024, marking an increase of 1.2 percentage points.

Among the amounts allocated from the state budget are the following for local authorities: 11 billion lei for the National Investment Program "Anghel Saligny" and the National Local Development Program, 8.18 billion lei for the implementation of specific investments through the PNRR, 3.3 billion lei for projects financed from non-reimbursable funds, 820 million lei for seismic risk reduction, 850 million lei for county and communal roads and 1.95 billion lei for balancing local budgets.

Read BVB indecision - investors await information on this year's outlook

• The Coţofeneşti helmet, missing in the Netherlands

The most shocking event of January 2025 took place at the Drents Museum in Assen, the Netherlands, where four pieces of Romania's Dacian treasure - the gold helmet from Coţofeneşti and three gold Dacian bracelets -, some of the most valuable artifacts of Romanian heritage, were stolen.

The robbery occurred the day before the end of the exhibition "Dacia! The Kingdom of Gold and Silver", which opened to the public on July 7, 2024 and was due to close on January 26, 2025. Over 77,000 visitors admired the 673 pieces on display, from the collections of 18 museums in Romania. On January 25, at around 03:45, a powerful explosion shook the Drents Museum, destroying the building's windows and causing damage to the surrounding area. Dutch police confirmed that the attack was meticulously planned, using explosives to break the museum's only exterior wall, allowing thieves access inside. The director of the Drents Museum, Harry Tupan, described the incident as "a black day for our museum and for the National History Museum in Bucharest", and Dutch authorities have launched a large-scale investigation, but to date the stolen heritage pieces have not been recovered. Surveillance camera footage shows several individuals involved in the robbery, and a burned-out car was discovered a few kilometers away, which is suspected to be related to the theft.

Romanian police are collaborating with Dutch investigators, and the Romanian Prosecutor General's Office has opened a criminal case for aggravated theft and failure to comply with the weapons, ammunition and explosives regime. The Ministry of Foreign Affairs has informed Romanian embassies in neighboring countries to obtain support in locating the stolen items.

Culture Minister Natalia Intotero said that all items were insured in accordance with international law.

The incident has caused outrage among Romanian authorities. President Klaus Iohannis spoke with Dutch Prime Minister Dick Schoof, who pledged the full commitment of Dutch authorities in identifying the thieves and recovering the stolen items. Prime Minister Marcel Ciolacu expressed his outrage at the lack of security measures at the Dutch museum and asked the Ministry of Justice to review the contract with the Drents Museum in order to seek compensation. He also mentioned the possibility of calling on international firms specialized in recovering stolen art objects and even offering a substantial reward for information leading to the discovery of the Dacian treasures.

The Minister of Culture was urged to take urgent measures to prevent such incidents in the future, including by reviewing the procedures for exporting national heritage. The checks in Bucharest resulted in the dismissal of the director of the National Museum of History, Ernest Oberlander-Târnoveanu. Unfortunately, although the Ciolacu government initially offered a reward of 200,000 euros, which it later increased, the goods in question have not yet been recovered.