George Simion rules out tax hikes despite Romania’s soaring deficit

Far-right frontrunner George Simion pledges no new taxes amid market turmoil, leu depreciation, and political uncertainty in Romania.

George Simion, presidential candidate and leader of the Alliance for the Union of Romanians (AUR), speaks during a press conference outside the Palace of the Parliament in Bucharest, Romania, on May 4, 2025. Photo by Ioana Moldovan/Bloomberg

By Anna Fadiah and Hayu Andini

Romania’s far-right presidential frontrunner, George Simion, has made a decisive stance on economic policy by categorically ruling out any form of tax increase, even as the country grapples with the largest budget deficit in the European Union. Speaking to private broadcaster Digi24 on Tuesday, Simion reaffirmed his tax-cutting agenda and laid out a controversial roadmap that includes massive public sector layoffs—but stopped short of presenting any concrete solutions to reduce the deficit and prevent a potential credit rating downgrade.

The announcement follows Simion’s dominant performance in the presidential election’s first round on Sunday, where he secured approximately 41% of the national vote. His victory triggered the immediate resignation of leftist Prime Minister Marcel Ciolacu and led to the collapse of the governing pro-Western coalition, creating a power vacuum in an already fractured political landscape.

Market response: currency drops and investor confidence rattled

Simion’s remarks had an immediate impact on financial markets. The Romanian leu plunged more than 2% on Tuesday, breaching the symbolic barrier of five lei per euro for the first time ever. Government bond yields spiked sharply, and the Bucharest stock exchange tumbled, as investor confidence was shaken by the unfolding political chaos and the lack of a clear fiscal recovery strategy.

In a bid to calm fears, Simion denied responsibility for the financial market jitters. "I've been accused of being to blame for the leu depreciation, stocks falling—let's be serious, who was in charge?" he said, referring to Ciolacu's tenure and accusing the outgoing government of fueling the deficit crisis.

A controversial economic strategy without clear fiscal answers

Despite the worsening fiscal outlook, Simion rejected any tax increases, arguing that higher taxation would push Romania into a recession. “Any tax hike means recession,” he declared. “That is not the solution. I will advocate lower taxation for the minimum wage.”

Instead, Simion proposed an ambitious five-year plan to eliminate 500,000 public sector jobs, excluding doctors, teachers, and soldiers. While he claimed this would be a cornerstone of his economic policy, critics say the plan lacks specificity and could face fierce resistance, especially in a country where public employment remains a vital source of stability in many regions.

The candidate offered no detail on how he would balance public finances without raising revenue, especially with Romania teetering on the brink of a credit downgrade. All three major credit rating agencies currently assign Romania the lowest possible investment-grade rating, each maintaining a negative outlook due to the structural deficit and political uncertainty.

Political deadlock and potential snap elections

Until a new president is sworn in and appoints a prime minister, Romania’s government remains in an interim capacity—unable to introduce new laws or implement budgetary reforms. This leaves the country in a state of economic limbo, with urgent fiscal issues left unaddressed.

Simion made it clear that his preferred choice for prime minister is Calin Georgescu, the far-right pro-Russian candidate who was banned from the presidential race in December over allegations of Russian interference—claims that Georgescu and the Kremlin deny. “I believe I will nominate Mr. Georgescu and we will find 50% plus one lawmakers to vote for him,” Simion said.

However, Romania's parliament remains deeply divided. The far-right controls more than a third of seats, but Simion would still need to forge alliances with other factions to secure a governing majority. If he fails, he did not rule out calling snap elections, a move that could further destabilize the country and delay urgently needed economic measures.

Rising populism amid institutional fragility

Simion’s rise reflects growing public dissatisfaction with the traditional political establishment and disillusionment with EU-linked reforms. His platform echoes nationalist and populist movements seen elsewhere in Europe, blending euroscepticism, anti-tax sentiment, and a promise to “return Romania to Romanians.”

Although his economic program remains vague, his support base has proven resilient—especially after the cancellation of Georgescu’s candidacy, which many voters saw as undemocratic. Simion’s landslide on Sunday was interpreted by many as a referendum against the establishment and its failure to address corruption, inflation, and declining living standards.

Run-off showdown: Simion versus Dan

Simion is now set to face Bucharest Mayor Nicusor Dan, an independent centrist, in a highly anticipated run-off election scheduled for May 18. Dan, seen as a pro-EU and fiscally conservative figure, attempted to calm markets on Tuesday by issuing a public reassurance.

“There is no reason for financial panic on Romania,” he said. “Together we must project a message of calm and stability.”

Dan’s call for calm comes as Romania’s fiscal and political fate increasingly hangs in the balance. If Simion secures the presidency and pushes ahead with his controversial tax-cutting strategy, tensions with the EU and financial institutions could escalate.

The road ahead: deepening uncertainty

Romania’s political paralysis comes at a critical moment. With the EU pressing member states to rein in deficits and implement digital and green reforms, any deviation could result in withheld funding. Simion’s hardline rhetoric and alignment with banned pro-Russian figures could also risk damaging Romania’s standing within NATO and the EU.

While his vow to avoid tax hikes may win popular appeal, economists warn that without new revenue sources or credible reforms, Romania’s public finances may worsen, potentially triggering further currency devaluation, rising inflation, and diminished access to international credit markets.

For now, George Simion remains the man at the center of Romania’s political transformation—offering bold rhetoric, few fiscal details, and a pathway that could dramatically reshape the country’s direction for years to come.