EC invites Romania to cut budget deficit until 2011

The European Commission invited Romania on June 24 to get assured that the process of
correlation of the excessive deficit will take place until 2011, read the recommendations made by
the community Executive after the initiation on May 13 of the procedures in the case of the
excessive deficit. The Romanian authorities have, for 2009 a target of budget deficit worth 5.1%
of the Gross Domestic Product, with the intention of cutting the deficit under the threshold of
three percent of GDP until 2011. In order to get sure that this deficit is reached, the Commission
invites Romania to implement the fiscal measures foreseen in the budget adopted in the month of
February 2009 and revised in the month of April 2009, notably as regards the salaries in the
public sector and the reform of pensions, to take new corrective measures, in case of need, in
order to reach the deficit target for 2009 and to specify what are the measures taken into account
for the foreseen cut in the deficit in 2010 and 2011. Also, the European Commission invites
Romania to take concrete steps towards the consolidation of the governmental finance and of
transparency, in particular by arranging a mandatory budget framework on a medium term, the
creation of an independent fiscal council, the introduction of limits to the budget revisions and the
restructuring of the system of compensations in the public sector, including salaries and bonuses,
and in the fiscal field to improve the efficiency of the collection of taxes by the reforming of the
fiscal administration and the enlargement of the basis of taxation. In addition, the community
Executive asks Romania to speed up the reform of pensions, notably as regards the indexing of
pensions and the pensioning age, in order to limit a substantial increase in the expenses allocated
to old-age people and to reduce the risks as regards the sustainability of the public finance and
the improvement of the efficiency of the spending in the public healthcare system. Last but not
least, the European Commission asks Romania to consolidate the part of offer of the Romanian
economy, by making progress in the implementation of structural reforms, notably by the rise in
the efficiency of the public administration, the improvement of the business environment and the
increase of the absorption and use of the EU funds. On April 1, 2009, Romania, Poland, Lithuania
and Malta notified the Commission in connection with the level of their public deficit, which
exceeded 3% in 2008. Within three weeks, the Bureau of Statistics of the European Commission,
Eurostat, verified the data released by the member states. The EC has next drawn up an
analytical report containing its proposals as regards the remedying of the situation connected to
the existence of the excessive deficit. The document was forwarded to the ECOFIN Council, that
met on June 9, and that, on the same day, presented as possible the necessary measures of
correction of the deficit, accompanied by a deadline for its application. Six months after the
adoption of the recommendations by the Council - so, by the end of the year, the European
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Commission will make a new assessment of the situation, in order to see if the measures were
applied adequately and if they were efficient.

Source: Agerpres.