“Latvia and Romania have both reduced their deficits below 3% last year, in 2012, and they also stay below the reference value in the forecasts for 2013 and 2014. Therefore, both countries seem to be firmly on track for a sustainable correction of their excessive deficit, and thus for an exit from the excessive deficit procedure,” according to Rehn.
“Overall, out of the 20 countries currently in excessive deficit procedure, we could thus have three evident candidates – Latvia, Romania and Lithuania – for abrogating or exiting the excessive deficit procedure, and another two member states – Italy and Hungary – can do it provided that they stay the course of fiscal sustainability,” Rehn also said.
Romania’s consolidated budget posted last year a deficit of 2.9%, under European standards, and the EC estimates a reduction to 2.6% in 2013 and to 2.4% in 2014.
The European Commission in 2009 recommended an excessive-deficit procedure be launched against Romania, due to a budget gap of 5.4% of GDP in 2008. The eastern European country was given until December 2012 to lower its deficit.
Consequently, Romania had to implement severe measures to lower its deficit, including a 25% cut in the public wage bill and a five percentage point increase in the sales tax.