Romania Reduces Free Digital ID Distribution Amid Fiscal Crisis and Low Public Interest

Romania Scales Back Digital ID Program

Romanian authorities have announced a significant reduction in the number of digital identity cards planned for free distribution, citing a prevailing fiscal crisis and unexpectedly low public interest. The decision, formalized through a memorandum from the Ministry of Internal Affairs (MAI) dated August 14, will see the target for free digital IDs lowered from 5 million to 3.5 million. This move also involves a budget cut of €21 million (approximately $24.6 million) from the initial allocation for the digitization project.

Challenges and Missed Targets

The digital ID initiative, formally known as the cărtii electronice de identitate (CEI), is a key component of the European Union's Recovery and Resilience Plan (PNRR). Under this plan, Romania was mandated to issue 5 million free electronic IDs by June 2026. However, the project has faced considerable delays since its official launch in March, beginning in Cluj County and expanding to Bucharest in April. As of August, only 436,674 electronic IDs have been issued nationwide, a figure significantly below the original target.

Beyond the ID cards themselves, the PNRR also required Romania to develop and implement 11 online public services accessible via the new digital IDs. To date, only four of these services have been completed, with the remaining seven still in the analysis and implementation stages. The slow pace of implementation and the reduction in ID distribution could lead to severe financial repercussions for Romania, including a potential fine of €264 million (approximately $310 million) from the European Commission for non-compliance.

Fiscal Pressures and Public Reluctance

The MAI justified the budget cuts by pointing to the country's 'systemic fiscal risk' and the need to 'streamline the use of funds.' Romania has been grappling with a substantial budget deficit, ending 2024 with a deficit of 8.7% of GDP, one of the largest in the EU. Despite fiscal consolidation measures implemented in late 2024, the deficit is projected to remain high at 8.6% of GDP in 2025 and 8.4% in 2026.

Public interest in the new digital IDs has also been cited as a major hurdle. Citizens have reported issues such as long queues at registration offices, and some public and private institutions are reportedly not yet equipped with the necessary readers to process the new cards. To counter the low adoption rate, the government plans to organize national 'caravans' to promote the eIDs and allow online registration for required documents.

Future Outlook

The scaling back of the digital ID program highlights the challenges Romania faces in its broader digitalization efforts amidst economic constraints. While the government aims to modernize public services and leverage technology for economic improvement, the current adjustments underscore the difficulties in meeting ambitious EU-backed targets when confronted with fiscal realities and citizen engagement issues. The country's ability to avoid the substantial EU fine will depend on its revised strategy and accelerated efforts to meet the adjusted targets.