Press Release: Commission assesses convergence programmes of Bulgaria, Latvia and Romania

Having examined the first convergence programmes of Bulgaria and Romania, the European Commission finds that the budgetary position of Bulgaria is sound. However, Bulgaria is encouraged to achieve a higher surplus than currently planned in 2007 and to maintain a comfortable budgetary surplus in coming years so as to foster macroeconomic stability and reduce external imbalances. Romania, which enjoys even higher growth than Bulgaria and faces a widening external deficit, should improve its budgetary position by a significant adjustment in order to obtain a sufficient safety margin against breaching the 3% ceiling and to avoid a pro-cyclical policy. Romania should also control the increase in public spending and review its composition. The Commission has also examined the updated programme of Latvia and finds that the planned fiscal loosening in 2007 is inconsistent with a prudent fiscal policy aimed at ensuring sustainable convergence. From 2008, some progress is envisaged, but there are risks to the achievement of the budgetary targets which lack ambition given the high growth also enjoyed by the country.