Romania coal vote risks €5 billion

Romania’s parliament has chosen an awkward moment to reopen the coal question. On 5 August, the Chamber of Deputies voted 180-9 to require coal-fired power plants to remain available until replacement low-carbon capacity is built and operating (Capital).

That decision now sits with President Nicușor Dan. His choice will decide whether Romania can still draw down roughly €5 billion in remaining EU recovery grants before the August deadline closes. The risk is not theoretical. The amendment may reverse a reform that Brussels had already accepted as part of Romania’s recovery plan, and had already paid against.

The president can still stop it

The law has not taken effect. Under Romania’s constitution, Dan has 20 days to sign it, send it back to parliament, or refer it to the Constitutional Court (CCR). On 4 August, he said he could use "all constitutional prerogatives" to block it (Romania Insider). The government, through interim investments minister Dragoș Pîslaru, has formally asked him to do exactly that (Observator).

If Dan sends the bill back, parliament must look at it again. If he signs it, the decision moves to the European Commission. Brussels will then have to judge whether Romania has undone milestone 114, the coal phase-out commitment linked to its recovery payments (Digi24). For now, the Commission has said only that it is "following developments closely" (Stiripesurse).

Why this threatens billions

Romania’s recovery plan, known as the PNRR, is not like older EU funding where governments send in receipts and wait for reimbursement. Under the Recovery and Resilience Facility, money is paid when governments prove they have delivered agreed reforms and investment targets (Regulation (EU) 2021/241, Council of the EU).

That matters because the Commission can suspend future payments if it decides a completed reform has been reversed. Ireland knows the political weight of EU conditionality from the bailout years, though this is a different instrument. The mechanism is still blunt: deliver the agreed reform, or the money stops.

The timing leaves little room for repair. All milestones must be completed by 31 August 2026, with final claims submitted by 30 September (Commission closing guidance). Romania has received about €12.97 billion so far, roughly 60% of its total allocation (Romania Insider). Pîslaru says about €2 billion in grants is tied up in the fifth payment request and €3 billion in the sixth, the last two claims for EU money (Digi24 Economic).

A real grid problem, the wrong fix

The energy concern behind the vote is real. Romania committed to withdrawing 1,045 MW of coal capacity by the end of 2025 and another 710 MW by 31 August 2026 (Agerpres). The amendment passed because the replacement capacity is not yet ready.

A recent drought on the Danube forced emergency measures to keep the Cernavoda nuclear plant cooled, exposing how narrow Romania’s power margin has become (EUalive). Keeping coal plants available for moments of pressure is not an absurd position. It is a grid-security issue.

The question is why parliament chose this route. The PSD-AUR alliance that backed the amendment presented it as a defence of energy security and jobs at plants such as Rovinari and Turceni (Libertatea). Acting Prime Minister Bolojan warned that rewriting the milestone could mean penalties above €1 billion and could block final payments, even after the government had renegotiated better terms with Brussels (ActMedia).

Poland offers the obvious comparison. It has the EU’s most coal-dependent grid, with coal generating about 61% of electricity in 2023 (IEA). Warsaw kept the coal-security problem inside a capacity-market scheme, where the state pays power plants to remain available. Brussels approved that under EU rules on when governments may subsidise companies (European Commission). Poland protected reserve capacity without reopening reforms already tied to EU recovery funding.

Who pays

If the amendment survives and the Commission treats it as a reversal, the cost will not sit neatly inside the energy sector. Recovery grants fund hospitals, schools, roads and digitalisation across Romania. Replacing lost grants with borrowing would hurt: Romania already pays high interest rates on its debt, and fiscal pressure is building (To Brief).

The coal regions the amendment claims to protect could lose twice. They may keep ageing plants running for a while longer, but lose the EU transition money meant to build the next economy after coal. The winners are narrower: incumbent coal operators and politicians able to say they defended regional jobs before the next election.

Romania has a genuine grid-security problem. Parliament has turned it into a fiscal crisis with 26 days left on the clock.