The EU Council has adopted a decision Tuesday reading that Romania has failed to take effective measures to correct a significant budget deviation, a communiqué issued after the meeting of the Council for Economic and Financial Affairs (ECOFIN) in Brussels during December 4-5, 2017.
The European Council adopted on Tuesday the decision sanctioning that Romania did not act in fact to correct the significant deviation from the structural budget deficit, according to a communiqué issued by the Council, ziare.com informs.
A new recommendation was issued at the request of the European Commission, reviewing the older one, according to the significant deviation procedure. Thus, Romania will have to operate even more severe correction of 0.8% of GDP, according to the decision of the European Council.
The European Council document quotes the autumn figures, according to which Romania’s structural deficit (MTO) increases by 1.1%, despite the 0.5% of GDP adjustment requested in June.
The risk is that this deterioration will generate an estimated deficit of 3.3% of GDP in 2017, above the EU ceiling, which will require that Romania is included in the excessive deficit procedure, in line with the Pact for Growth and Stability.
Moreover, the increase in Romania’s net primary government expenditures amounted to 4.9% of GDP in 2017, much above the 3.3% ceiling set by the Council, requiring measures to ensure a nominal increase in net primary government spending of less than 3.3% in 2018, representing a structural adjustment of at least 0.8% of GDP. The Council recommends that any unexpected revenues to be used to mitigate the deficit and that the budgetary consolidation measures provide a lasting improvement in the structural balance of government spending.
The Council has set a deadline – April 15, 2018 – for Romania to report on the actions taken in response to the revised recommendation.