Victor Ponta

Romanian Prime Minister Victor Ponta on Monday said the government will raise the defence budget by 700 million lei (some 156 million euro), from current 6.4 billion lei, in order to upgrade military capabilities.

Romania's government plans to increase its defense budget over possible tensions on its eastern borders with Ukraine.

Prime Minister Victor Ponta announced plans for defense expenditures, which currently amount to 1.36% of GDP to reach 2% by 2017.

Romania's excise on fuel, gas and tobacco has come into force, in compliance with an agreement that Bucharest struck with the IMF.

From Monday, fuel prices in Romania will increase with EUR 0.07 per liter, a pack of cigarettes will go up by EUR 0.6 to EUR per liter, and gas will be 2% more expensive for consumers Dnevnik.bg has reported.

Romanian Prime Minister Victor Ponta has said his centre-left government will not revoke a controversial fuel tax coming into force on April 1, but promised compensatory measures.

“The measure will help ‘fair' transporters, without a history of tax evasion, who will be able to recover most of the costs [of the new tax],” Ponta said, without offering further details.

Ukraine crisis significant for Chinese investment in Europe

Beijing has made clear that it wants to retain good relations with the new, pro-Western coalition government in Kiev.

(From left) BiH Prime Minister Vjekoslav Bevanda, Chinese Premier Li Keqiang and Romanian Prime Minister Victor Ponta pose for a photo at a November summit in Bucharest. [AFP]

The Prime Ministers of Bulgaria and Romania, Plamen Oresharski and Victor Ponta, have agreed to back Serbia's EU bid at a meeting in the Danube city of Ruse.

Fears that President Traian Basescu might hold up the formation of Romania’s new government ended on Wednesday when the 17 members of the reconfigured cabinet finally took their oath in the Cotroceni palace.

Romania's centre-left coalition looked close to splitting up after Klaus Johanis, a leader of National Liberal Party, PNL, on Monday said he was “not very optimistic that the coalition will survive tomorrow.

“We failed to find a solution to the proposed cabinet changes. As a result, our party will decide on Tuesday if our ministers will leave the government or not,” he added.

Prime Minister Victor Ponta on Wednesday took over the role of interim Finance Minister while another member of his ruling Social Democrat Party, PSD, will temporarily head the economy portofolio.

The moves are the latest in a weeks-long feud among Romania’s ruling coalition members, which escalated after the parties failed to agree on cabinet changes.