The collapse of Romania’s governing coalition could complicate 2027 budget talks, Karen Vartapetov, an analyst specializing in CEE & CIS sovereign ratings at financial rating agency S&P Global Ratings, warned on Wednesday, Reuters reports.

“This is important because Romania’s commitments to reduce fiscal deficits imply additional consolidation measures in the coming years,” he said.

According to the financial rating agency, S&P Global’s warnings regarding the downgrade of Romania’s and Hungary’s credit ratings reflect the fiscal risks faced by the two emerging European countries.

Fiscal risks have been the key risks for sovereign ratings in CEE (Central and Eastern Europe) for years, Karen Vartapetov explained, according to Agerpres.

The impact of stagflation following the global energy price shock, together with energy-related support measures, is likely to increase pressures on budgetary positions already strained by high defense spending and generous social transfers, he added.

“Our negative outlooks on Romania and Hungary and the recent downgrade of Slovakia’s credit rating clearly reflect these risks,” Vartapetov said.

In April, the financial rating agency S&P Global Ratings affirmed Romania’s long- and short-term debt ratings at “BBB minus/A-3,” with a “negative” outlook, putting Romania one step away from a “junk” rating.

Parliament adopted on Tuesday the motion of censure initiated by PSD, AUR and PACE – Romania First lawmakers against the government led by liberal Ilie Bolojan. There were 281 votes “in favor”, four votes against, and three votes were annulled.