“On 5 December 2017, the Council adopted a decision establishing that Romania has failed to take effective action to correct a significant budgetary deviation. It issued a new recommendation, revising a recommendation already addressed to Romania under the EU’s ‘significant deviation procedure’. Romania is responsible for a significant deviation from the agreed adjustment path towards its medium-term budgetary objective”, the Council said in a statement on Wednesday.
Both the medium-term objective and the significant deviation procedure are part of the preventive arm of the Stability and Growth Pact, the EU’s fiscal rulebook. The preventive arm focuses on structural balances, i.e. budgetary balances corrected for cyclical, one-off and budgetary factors. It thereby isolates the impact of discretionary government policy action and spending on interest repayments.