Budget deficit reduction plan
By October 15, Romania should present the European Commission with a plan to reduce budget deficit, by October 15.
Ştefan Stoica, 03.10.2024, 14:00
Rating agencies, economists and analysts alike are signaling the excessive budget deficit, which could reach 8% of Romania’s GDP this year. European Union member states have to submit a deficit reduction plan to the Commission, by October 15 . Romania is among the countries that have not done so yet, but the Social-Liberal Government in Bucharest has promised to observe the deadline and present the 7-year plan to bring the deficit back within the limits accepted by the Union. The Romanian Minister of European Investments and Projects, Adrian Câciu: “This 7-year plan comes with a series of reforms which should not surprise anyone. They are included in the National Recovery and Resilience Plan. It is just an active calendar for those reforms to be conducted. From what I know and from what will happen – I hope it will happen, because I think we are a coalition of responsible people – by October 15 this plan will be submitted to the Coalition, approved and sent to the Commission. It is, after all, a general plan. It is the first assessment that we are sending, after which there will obviously be technical negotiations with the Commission, which may last until April 2025, when the Commission makes the last adjustment in the case of all member states. Romania is not the only country that is in an Excessive Deficit Procedure.”
The most important fiscal-budgetary consolidation measures are those of reducing expenditure and, at the same time, further improving collection to the state budget, following digitization, Minister Câciu said. According to him, the reduction of unnecessary expenses in the area of large public services must be continued, where the institutions need reform and quality increase. On the other hand, the digitization of the National Agency for Fiscal Administration (ANAF), must bring not only 0.5% of the GDP in recovered revenues , but 2% or 3% next year, Adrian Câciu said. Romania, the Minister explained, needs a 7-year deficit reduction plan, agreed on with the European Commission, given that it has very high investment-related expenses, which, in his opinion, nobody wants to postpone or cancel.
The Bucharest Government has recently carried out the first budget revision this year, a positive one. It was based on a budget deficit of 6.9% of the GDP and a revised economic growth, from 3.4% previously estimated, to 2.8%. The Minister of Finance, Marcel Boloş, said on that occasion that additional funds had been allocated to the large investment projects, a leitmotif in the authorities’ speech. Boloş too, supported by his boss, Prime Minister Marcel Ciolacu, gave assurances that the deficit was sustainable.
