European Commission cautions Romania
Romania's overspending is becoming a problem, the European Commission has warned
Corina Cristea, 25.05.2023, 14:00
The European
Commission has again referred to the economic situation in Romania, at present
the only EU Member State targeted by the excessive deficit procedure (EDP)
based on evolutions prior to the pandemic. The warning comes as the Commission
has published a set of general fiscal, financial and economic recommendations
for each Member State. Brussels does not want to take other similar actions in
the upcoming period, Commission vice-president Valdis Dombrovskis says, arguing
that a re-assessment of criteria to meet debt and deficit targets will be made
this autumn and next year in spring. In particular, the Commission wants Member
States to comply with recommendations in the European semester, vice-president
Dombrovskis also pointed out, adding that investments should be doubled by a
very firm control of current spending.
As regards Romania, the European
official said our country’s budget deficit for 2022 complies with the EU
Council recommendations, which is why the EDP is kept in standby. But since
there are substantially larger risks for the current year, more efforts are
needed to attain the set targets, Valdis Dombrovskis went on to say. According
to European officials, Romania is overspending at present, and needs to bring
the budget deficit below 3% by 2024. The Commission’s recommendation is that
the government should cut support measures in the energy sector, which are
currently in place until the end of 2023, and use the resulting savings to
curtail the deficit. Another recommendation is to ensure efficient governance
and consolidate administrative capabilities so as to allow for a continuous,
swift and constant implementation of the recovery and resilience plan. Romania
was given six months to solve all the issues signaled by the Commission with
respect to certain milestones or targets in the National Recovery and
Resilience Plan, which it has not properly fulfilled. State Secretary with the
Ministry of Investments and European Projects, Carmen Moraru explained that
only the funds earmarked to these projects can be suspended, not the entire
€2.8 bln representing the second installment disbursed to Romania. Referring to
the current phase of its implementation, Carmen Moraru said the plan stipulates
funding contracts worth €26 bln, addressing the ministries of development,
transports, education and the environment, which launched major projects. (VP)
