Recommendation for a Council Recommendation with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania

The Council abrogated its decision on the existence of an excessive deficit in Romania on 21 June 2013, on account of the correction of Romania's excessive deficit in 2012, which, based on the Commission 2013 spring forecast, appeared durable. Since then Romania has been subject to the preventive arm of the Stability and Growth Pact, which requires sufficient progress towards the medium-term budgetary objective (MTO). Romania is not subject to the debt rule as its general government debt remains below 60% of GDP.

On 12 July 2016, the Council addressed recommendations to Romania in the context of the European Semester. In particular, in the area of public finances the Council recommended Romania to limit the deviation from the MTO in 2016 and achieve an annual fiscal adjustment of 0.5% of GDP in 2017 unless the MTO is respected with a lower effort.

The Staff Working Document accompanying this recommendation presents macroeconomic and fiscal developments in 2016-17. It presents an assessment of compliance with the obligations stemming from the Stability and Growth Pact, including an overall assessment of the reasons for the deviation from the requirements of the preventive arm. It also proposes a fiscal effort for 2017 to address the significant deviation, including a new applicable expenditure benchmark rate compatible with the suggested annual improvement in the structural balance.

EUR-Lex: SWD(2017)174: Commission Staff Working Document accompanying the recommendation http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2017:174:FIN

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