EC criticizes Romania budgetary policy, recommends public spending control

European Commissioner for Economic and Monetary Affairs Joaquin Almunia declared on Wednesday, during the convergency program evaluation meeting, that the growing budgetary deficit is a serious problem for Romania. Almunia thus renews the warning first launched six months ago, when he warned about the excessive deficit Romania may reach. The criticism of European officials over the lack of a prudent budgetary policy were doubled in 2007 by statements made by the International Monetary Fund Experts, who also drew the attention of the fact that the government estimated in several occasions too optimistic income and expense rates, a thing that may jeopardize the macroeconomic balance of the country.

„Romania’s growing deficit and its volatility represent a serious problem. Romania needs more ambitious budgetary targets, so it would not come against the regulations within the Pact for Stability and Growth and also to limit the foreign deficit growth and inflation pressures”, said Almunia after the Commission evaluated Romania’s updated convergency program.

The 2008 Budget Law includes a 2.7% deficit limit. The Pact for Stability imposes a maximum of 3% in all EU member states. The Commission has instruments to use against states with higher deficit rates, considered as excessive.