European Commission proposes Romania annual structural adjustment of at least 1pct of GDP

The European Commission has established that no effective action was taken by Romania in response to the council recommendation of June and proposes that the council adopts a revised recommendation to Romania to correct its significant deviation from the adjustment path towards the medium-term budgetary objective.

In June 2018, the council issued a recommendation of an annual structural adjustment of 0.8 percent of GDP in both 2018 and 2019 to Romania under the Significant Deviation Procedure (SDP), according to a press statement released by the European Commission on Wednesday.

"In light of developments since and following the lack of effective action by Romania to correct its significant deviation, the Commission now proposes a revised recommendation of an annual structural adjustment of at least 1 percent of GDP in 2019."

The public deficit has increased in Romania from 0.5 percent in 2015 to 2.9 percent in 2016 and is forecast to reach 3.3 percent in 2018, 3.4 percent in 2019 and 4.7 percent in 2020: this is the highest deficit in the EU.

The European Commission asks the Council of the European Union to adopt specific country recommendations and the member states to fully implement them on time. The EU ministers would discuss specific country recommendations before EU heads of state or government support them. It is up to the member states to implement the recommendations through their economic and budgetary policies in 2018-2019.

In June, the European Commission recommended Romania to correct a significant observed deviation from the adjustment path toward the medium-term budgetary objective (MTO), to ensure full implementation of the tax framework and to improve voluntary payment and tax collection.

Romania had until October 15 to respond formally in writing to the recommendations of the European Commission. AGERPRES (RO - author: Constantin Balaban, editor: Andreea Marinescu; EN - author: Corneliu-Aurelian Colceriu, editor: Rodica State)

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