Romania was represented by budget minister Liviu Voinea at the Ecofin meeting of Economy, Finance and Budget Ministers of EU countries.
“Ecofin took note of the winter forecast of the European Commission. The vice-president of the European Commission Olli Rehn presented the implications of the forecast on the excessive deficit procedure, and noted that Romania met the conditions for repeling the procedure,” the Finance Ministry said in a press release.
The European Commission launched the excessive budget deficit procedure against Romania in the spring of 2009 for exceeding 3% of GDP in 2008 because of higher than planned spending.
Romania will exit the excessive deficit procedure after the budgetary result for 2012 are sent to Eurostat and validated by the EU’s statistics office in April 2013.
In the last three years the Romanian Finance Ministry has managed to cut the budget deficit especially by implementing tough austerity measures. Romania experienced two years of dramatic adjustments (2010 and 2011), which meant layoffs, cutting public sector wages by 25% and hiking VAT, while state-run companies continued to record huge losses and pile up arrears.
In the middle of last year the authorities took the first step towards restoring the wages of public sector employees and this year wages returned to their level before the cuts.
Last year the budget deficit continued to narrow, but slightly exceeded the target agreed by the Romanian authorities with the IMF, the European Commission and the World Bank, for the first time in four years. The deficit target for 2012 was 2.2% of GDP, as calculated according to the cash methodology and less than 3% of GDP based on the European methodology (ESA 95).
(English version by Daniela Stoican)