EC Proposes Opening Excessive Deficit Procedure for Romania

The proposed recommendation provides that Romania should pursue a credible and sustainable adjustment path with a view to putting an end to the excessive deficit by 2022, at the latest.

Romania's interim finance minister Florin Citu said Wednesday the government's adjustment plan had been fully accepted by the Commission.

“We have been negotiating with the European Commission for the past three months and everything we have negotiated has been accepted. Romania has credible and sustainable plan to reduce the deficit,” said Citu.

Romania should reach a headline general government deficit target of 3.6% of GDP in 2020, 3.4% of GDP in 2021 and 2.8% of GDP in 2022, the EC said.

Romania should specify and rigorously implement the measures that are necessary to achieve the correction of its excessive deficit by 2022. Budgetary consolidation measures should secure a lasting correction in a growth-friendly manner. Romania should use any windfall gains for deficit reduction.

The Council establishes the deadline of 15 September 2020 for Romania to take effective action and to report in detail the consolidation strategy that is envisaged to achieve the targets. Thereafter the Romanian authorities should report on progress made in the implementation of these recommendations at least every six months until the excessive deficit has been corrected.

Romania posted a budget deficit of 4.6% of GDP in 2019. Romania's 2020 state budget is built on a deficit target of 3.6% of GDP and the government's fiscal strategy targets a deficit below the EU limit of 3% in 2022.

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