The ambassadors of the Member States' ambassadors to the European Union (Coreper) launched the excessive deficit procedure against Romania on Wednesday 1 April.
The draft EU Council recommendation, which will be adopted following a written procedure concluded on Friday, calls on the Romanian authorities to put an end to the current excessive deficit situation by 2022 at the latest by respecting the following budgetary path: a deficit of 3.6% of GDP in 2020, 3.4% in 2021 and 2.8% in 2022.
This path corresponds to an annual structural adjustment of 0.5% of GDP in 2020, 0.8% in 2021 and 0.8% in 2022, with the aim of implementing corrective measures without damaging growth. All potential windfall gains should be allocated to deficit reduction.
Romania, which is not a member of the euro area and therefore not exposed to financial penalties, is invited to submit a detailed report by mid-September 2020 on the envisaged consolidation strategy to achieve the targets.
In its winter forecast presented before the outbreak of the Covid-19 pandemic, the Commission estimated that the Romanian general government deficit would increase from 4% to 7.7% of GDP between 2019 and 2022, assuming unchanged policies. Romania's public debt could increase from 34.7% to 46.6% of GDP between 2018 and 2022.
See the draft EU Council recommendation: https://bit.ly/3bFj2F9 (Original version in French by Mathieu Bion)