EU: Romania Took Effective Action To Lower Budget Gap

Romania has taken effective measures to lower its budget deficit to below 3% of the gross domestic product by the 2012 deadline, the European Commission said in a statement Tuesday.

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No further steps in the excessive deficit procedure launched against the country are needed at present, the Commission added.

The European Union has recommended excessive procedure be launched against Romania and Lithuania and gave both countries until 2012 to lower their budget deficits.

"Based on current information, it appears that Romania has taken effective action," the Commission said.

Romania's austerity pack, including a 25% pay cut in the public sector and a 5 percentage point increase in the sales tax to 24%, has put the country "on track" to achieve its budget deficit targets for 2010 and 2011, while the government's commitment to reduce the gap to below 3% of GDP in 2012 "appears attainable," the statement noted.

"Lithuania and Romania have undertaken adequate steps towards correcting their budget deficits. Both countries are on track to bring their deficits to below 3% by the agreed deadlines, but they need to pursue their efforts to ensure this really happens", said Economic and Monetary Affairs Commissioner Olli Rehn.

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