Romania Pushes Forward State-Owned Companies Reform to Reduce Losses and Boost Efficiency
Government outlines strategic overhaul aimed at strengthening the economy and public finances
The completed reform of state-owned companies will deliver tangible improvements in both the economy and the public budget, according to Ilie Bolojan, who emphasized the need for economic efficiency (eficiență economică) and stronger public budget management (gestionarea bugetului public). On Thursday, he stated that these changes are intended to benefit Romania and its citizens, underlining the urgency of addressing long-standing structural inefficiencies (ineficiențe structurale) and persistent financial losses (pierderi financiare) within state-controlled enterprises.
'We have a clearer picture of state-owned companies and a structured work plan for the coming period. Romania has over 1,500 companies in which the state is a shareholder, and many of them operate inefficiently and generate significant losses for the public budget. In total, we are talking about approximately 14 billion lei in losses in recent years, money that could have gone into important investments for Romanians,' the Prime Minister wrote on Facebook, pointing to the scale of state ownership (proprietate de stat) and the impact of resource misallocation (alocare ineficientă a resurselor) on national development.
He explained that the reform began with 'a pilot project targeting 22 companies in energy, transport and industry', sectors critical for economic stability (stabilitate economică) and infrastructure development (dezvoltarea infrastructurii). These companies, he noted, 'accumulated, in a single year, budgetary debts of over 4 billion lei and losses of over one billion lei', illustrating the burden of budgetary deficits (deficite bugetare) and the consequences of inefficient management (management ineficient).
'This is the annual bill that Romanians bear due to the lack of decision', the PM emphasized, highlighting the cost of delayed reforms and insufficient policy implementation (implementarea politicilor) in addressing systemic issues.
According to him, the reform 'starts from the principle that the state must behave as a responsible owner', reinforcing the importance of corporate governance (guvernanță corporativă) and strategic oversight (supraveghere strategică) in public enterprises. 'This means knowing clearly what it owns, why it owns and what it will do with each company. The problem has been accumulating for years', he added, pointing to the long-term nature of these challenges.
Based on this analysis, the Government has defined several directions of action, focusing on companies that play a role in critical infrastructure (infrastructură critică) and the broader national economy (economia națională). Enterprises such as ELCEN, Oil Terminal or CFR will receive support through investments and more professional management, reflecting their importance in maintaining essential services and economic continuity.
'At the same time, for companies with a strategic role, such as Avioane Craiova or Romaero, decisions will be taken in coordination between the institutions involved, based on independent analyses and audits, so that it is clear how their industrial potential can be better exploited. Where modernization is needed, we are considering aligning with European models, such as the Boiler Control Company (CNCIR), which will be reorganized to become a more competitive structure and closer to the standards of similar operators in Europe. Companies with problems (losses, subsidies increasing year by year), such as CFR Calatori, Metrorex or TAROM, are entering a process of operational recovery, with efficiency measures and international expertise. We can no longer prolong situations that produce losses year by year. Where there are overlaps and inefficiency, we will make mergers and integrations. For example, in the case of companies such as CFR Telecommunications or Tipografica Filaret, the goal is to reduce costs and increase efficiency. And where companies no longer have a future, we close them gradually and in an orderly manner. Cases such as CFR Marfa or Petrotrans show why this reform can no longer be postponed. We can no longer accept situations in which companies that have been bankrupt for years continue to consume public money', the PM said, outlining a broad strategy involving industrial restructuring (restructurare industrială) and operational recovery (redresare operațională).
Ilie Bolojan also stated that work is underway on a list of companies that could be listed on the stock exchange through the sale of minority stakes, a move aimed at boosting capital market development (dezvoltarea pieței de capital) and increasing financial transparency (transparență financiară).
'The state will remain the majority shareholder, and control over strategic decisions will be fully maintained. Among the companies under consideration are Hidroelectrica, Romgaz and CEC Bank, and for others, such as Transgaz, the Port of Constanta or the Romanian Post, the process depends on the fulfillment of certain preconditions. This stage will contribute to the development of the Romanian capital market, to increased transparency and to a better performance of state-owned companies,' the prime minister stressed, pointing to the role of public listings (listări publice) and minority share sales (vânzarea participațiilor minoritare) in modernizing the sector.
He further announced that within the next 30 days, 'a new wave of evaluations will be launched, based on criteria related to the strategic importance and financial situation of the companies', signaling continued efforts toward performance evaluation (evaluarea performanței) and financial accountability (responsabilitate financiară).
'Romania can no longer afford the waste and blockages it has had up until now. The reform of state-owned companies, once completed, will mean real results in the economy and the public budget, for the benefit of Romania and its people,' the prime minister pointed out, concluding a plan centered on long-term economic sustainability (sustenabilitate economică) and improved public sector efficiency (eficiența sectorului public).
Additional context highlights that reforms of state-owned enterprises are a common strategy across Europe, often encouraged by institutions such as the European Commission to improve competitiveness, reduce fiscal pressure, and ensure better allocation of public resources. Countries that have implemented similar reforms have typically seen improvements in profitability, governance standards, and investor confidence, reinforcing the importance of market-oriented reforms (reforme orientate spre piață) and institutional modernization (modernizare instituțională) in achieving sustainable growth.
Photo caption: Industrial and infrastructure assets in Romania illustrate the scale of state-owned enterprises targeted by ongoing reforms aimed at improving efficiency and reducing public losses.
Key Romanian Vocabulary
eficiență economică economic efficiency
gestionarea bugetului public public budget management
ineficiențe structurale structural inefficiencies
pierderi financiare financial losses
proprietate de stat state ownership
alocare ineficientă a resurselor resource misallocation
stabilitate economică economic stability
dezvoltarea infrastructurii infrastructure development
deficite bugetare budgetary deficits
management ineficient inefficient management
implementarea politicilor policy implementation
guvernanță corporativă corporate governance
supraveghere strategică strategic oversight
infrastructură critică critical infrastructure
economia națională national economy
restructurare industrială industrial restructuring
redresare operațională operational recovery
dezvoltarea pieței de capital capital market development
transparență financiară financial transparency
listări publice public listings
vânzarea participațiilor minoritare minority share sales
evaluarea performanței performance evaluation
responsabilitate financiară financial accountability
sustenabilitate economică economic sustainability
eficiența sectorului public public sector efficiency
reforme orientate spre piață market-oriented reforms
modernizare instituțională institutional modernization
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