Romania to Tackle Debt with EU Loans, Slashing Eurobond Supply by 2026

Romania is charting a new financial strategy by significantly reducing its eurobond supply in 2026. This decision is backed by the availability of cheaper loans from the European Union and international financial institutions, as stated by the head of Romania's debt agency.

In response to its large budget deficit, Romania, one of the leading emerging market debt issuers, plans to cut government spending and raise taxes in collaboration with a broad coalition government. This approach aims to decrease the deficit from over 9% last year to around 6% by next year, avoiding a potential downgrade from investment grade.

Stefan Nanu, the finance ministry's debt agency chief, highlighted Romania's access to nearly 8 billion euros in non-market foreign funding primarily through EU recovery loans and defense mechanisms. This should reduce eurobond supply, aligning with more favorable fiscal conditions, potentially decreasing interest rates and yield spreads.