Balkan developments

published on 8/8/25 11:04 AM

Fiscal measures hit households in Romania amid record deficit

Romania is entering a difficult economic period, with commentators expecting the crisis to last at least a year. Since August 1, the country has been implementing new fiscal measures to tackle the huge budget deficit, which has reached 9.3% of GDP by 2024 – the highest level in the EU. Additional taxes are being introduced, with the basic VAT rate rising from 19% to 21%, and the reduced rate from 9% to 11%. The new measures are leading to a sharp increase in the price of goods and services, including food and medicines, which is putting a heavy strain on household budgets.

The measures are part of the government’s attempts to avoid financial collapse, as high interest rates on government debt make it difficult to service it and increase the risk of the country’s bankruptcy.

"A peculiarity of the situation is that, due to the crisis with the presidential elections last year, it turned out that interest rates are increasing. Credit rating agencies believe that the Romanian debt is risky, that the state may go bankrupt, which is why Romania finances its debt with loans at high interest rates. Thus, an increasing part of the state's funds are going to service these debts and pay these interests," explained to BNR-"Horizont" our colleague Vladimir Mitev from the Romanian section of Radio Bulgaria. According to him, the crisis period may last at least until the end of 2026. Other economic measures are also expected to be introduced.

Bosnia and Herzegovina's Election Commission terminates the mandate of President Milorad Dodik

The Central Election Commission of Bosnia and Herzegovina has terminated the mandate of the President of Republika Srpska Milorad Dodik, after an appeals court confirmed his sentence of one year in prison and a six-year ban from holding political positions. The reason is Dodik's failure to comply with the decisions of the high representative of the international community in the country, Christian Schmidt, responsible for compliance with the Dayton Peace Agreement.

The CEC's decision is unanimous and can be appealed within two days. After that, a decision must be made on early elections in Republika Srpska, which should be held within 90 days. Dodik rejects the verdict and says he will continue to perform his duties. He received support from Serbian President Aleksandar Vučić and Hungarian Prime Minister Viktor Orbán.

Dodik's unprecedented conviction highlights the complex political situation in Bosnia and Herzegovina. Republika Srpska, populated by Bosnian Serbs, is a semi-autonomous part and is trying to separate from the federation, populated by Bosnian Muslims and Croats.

Slovenia is on the verge of a revolutionary reform of the labor market

A new law providing for revolutionary changes in the labor market will partially enter into force in Slovenia from January 1, 2026, BTA reported, citing the Slovenian publication "24 ur". The changes provide for an increase in unemployment benefits, with the highest in the first 3 months, reaching 130% of the average gross minimum wage, currently exceeding 1,660 euros. Students will receive higher minimum hourly rates, the monthly work limit for pensioners is increased from 60 to 85 hours. In addition, workers of pre-retirement age - over 58 years old and with at least 35 years of work experience - are given the opportunity to reduce their working hours. They will practically be able to choose between a Friday off, an extended weekend or reduced working hours - six hours a day. This model, called 80-90-100, provides for 80% working time, 90% salary and full insurance. The idea is partly borrowed from Iceland, Ireland and Germany, where similar models have led to positive results: higher productivity, fewer absences and better efficiency, BTA notes.

However, the changes have not yet been published in the Official Gazette of the Republic of Slovenia due to a request for a referendum on the subject, so they have not entered into force, notes "24 ur".

14-year-old Turkish grandmaster is the youngest in the world's top 100

At just 14 years old, grandmaster Yagiz Kaan Erdogmus officially broke into the top 100 of the world rankings, marking a new important milestone in his career, Sportal.bg reported. The Turkish talent reached a new personal record of 2642 rating points in the FIDE rankings for August, which places him in 88th place in the world. This makes Erdogmus the second youngest chess player in history to enter the top 100, surpassed only by Grandmaster Judit Polgár, who in 1989 ranked 55th in the world at the age of 12 with a rating of 2555.

Erdogmus is now preparing for his participation in the FIDE Grand Swiss in Uzbekistan (September 4–15) and the FIDE World Cup in India (October 30–November 27).

Compiled by Miglena Ivanova
English version: R. Petkova

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