Decision 2020/509 - Existence of an excessive deficit in Romania - Main contents

EN

Official Journal of the European Union

L 110/58

According to Article 126 of the Treaty on the Functioning of the European Union (TFEU), Member States are to avoid excessive government deficits.

The Stability and Growth Pact (SGP) is based on the objective of using sound government finances as a means of strengthening the conditions for price stability and for strong sustainable growth that is conducive to the creation of employment.

The excessive deficit procedure (EDP) under Article 126 TFEU, as clarified by Council Regulation (EC) No 1467/97 (1) (which is part of the SGP), provides for the taking of a decision finding the existence of an excessive deficit. Protocol No 12 on the excessive deficit procedure, annexed to the Treaty on European Union and the TFEU, sets out further provisions relating to the implementation of the excessive deficit procedure. Council Regulation (EC) No 479/2009 (2) lays down detailed rules and definitions for the application of those provisions.

Article 126(5) TFEU requires the Commission, if it considers that an excessive deficit in a Member State exists or may occur, to address an opinion to the Member State concerned and to inform the Council accordingly. Having taken into account its report adopted pursuant to Article 126(3) TFEU and having had regard to the opinion of the Economic and Financial Committee adopted pursuant to Article 126(4) TFEU, the Commission concluded that an excessive deficit exists in Romania. On 4 March 2020, the Commission therefore addressed an opinion to that effect to Romania and informed the Council accordingly (3).

Article 126(6) TFEU states that the Council is to consider any observations which the Member State concerned may wish to make before deciding after an overall assessment whether an excessive deficit exists. In the case of Romania, that overall assessment leads to the following conclusions.

According to the data notified by the Romanian authorities on 30 September 2019 that were subsequently validated by Eurostat, the general government deficit in Romania reached 3 % of gross domestic product (GDP) in 2018, while general government debt stood at 35 % of GDP. Taking into account the revised GDP figures announced by the Romanian national statistical office after the publication of Eurostat’s press release, those ratios changed slightly, with the deficit standing at 2,9 % of GDP and debt at 34,7 % of GDP in 2018. For 2019, the notification indicated a planned general government deficit of 2,8 % of GDP.

On 10 December 2019, the government adopted the Fiscal-Budgetary Strategy for 2020–2022 (the ‘Fiscal Strategy’), with a general government deficit target of 3,8 % of GDP in 2019. This is above and not close to the TFEU reference value of 3 % of GDP. The excess over the TFEU reference value in 2019 is also not exceptional, as it results neither from an unusual event nor from a severe economic downturn in the sense of the TFEU and the SGP. The Commission 2020 winter forecast projects real GDP growth of 3,9 % in 2019 and 3,8 % in 2020, while the output gap is projected to be around zero. One-off items amounted to 0,1 % of GDP in 2019 and were due to a refund of the environmental stamp duty on cars. The planned excess over the TFEU reference value is not temporary for the purposes of the TFEU or the SGP. The Commission 2020 winter forecast, extended with...