The Commission also proposed the excessive deficit procedure be abrogated for four other members in the European Union, namely Italy, Latvia, Hungary and Lithuania, it said in a memo.
On the other hand, the Commission recommended that an excessive deficit procedure be launched against Malta, while extending the deadlines for correcting the excessive deficit in six other countries, including Spain, France and the Netherlands.
Additionally, Belgium should be given notice to correct its excessive deficit, the Commission said.
Romania has joined the list of EU countries with excessive deficit in 2009, when it recorded a budget gap of 9% of GDP. The deficit was subsequently reduced to 6.8% of GDP in 2010, to 5.6% of GDP in 2011 and to 2.9% of GDP in 2012, the Commission noted.
“The correction of the deficit has been driven mainly by strict control of expenditure growth, including through control of the public sector wage bill, a freeze in pensions and a reduction in all social benefits except pensions,” the Commission said.
The lower deficit was also supported by revenue measures such as a 5 percentage points increase in the value added tax rate and a broadening of the personal income tax base, it said.
The Commission estimates Romania’s general government deficit will decrease to 2.6% of GDP in 2013 and to 2.4% of GDP in 2014, assuming the authorities in Bucharest will not sidetrack from their assumed fiscal and economic policies.