March 4 (SeeNews) - The European Commission (EC) said on Wednesday that it has proposed to the Council to open an excessive deficit procedure (EDP) for Romania.
The Commission also adopted a recommendation to the Council setting out the adjustment requirements for avoiding the EDP, it said in a press release.
The proposed recommendation provides that Romania should pursue a credible and sustainable adjustment path with a view to putting an end to the excessive deficit by 2022, at the latest.
The country closed 2019 with a consolidated budget deficit equivalent to 4.6% of GDP, exceeding the 4.4% ceiling set by the government and EU's 3% threshold set through the Maastricht Treaty.
The next step is for the Council to decide on the existence of an excessive deficit in Romania and to adopt its recommendation on the adjustment path and the deadline to end the excessive deficit situation.
In February, the EC said that Romania needs to correct fiscal and external deficits and implement structural reforms in order to ensure steady economic growth. In the absence of lasting reform efforts, growing fiscal and current account deficits are putting the sustainability of Romania’s economic growth at risk, the Commission said in its 2020 country-specific recommendations on Romania, which are part of the European Semester Winter 2020 Package.
Romania's budget for 2020 is based on projections for economic growth of 4.1% and cash deficit equivalent to 3.59% of GDP.
(1 euro =4.8074 lei)