European Council asks Romania to report on fiscal consolidation strategy by Oct 15

The Council of the European Union on June 18 adopted the June 2 recommendation under the excessive deficit procedure for Romania.

The recommendation establishes that Romania should put an end to the excessive deficit situation by 2024 at the latest, providing for a two-year delay compared to the initial deadline set before the crisis.

The Council says that an extension to the current deadline for Romania to correct its public deficit would be important in order not to compromise the economic recovery after the COVID-19 pandemic.

The new deadline for correcting the excessive deficit allows for a more gradual effort and a balance between fiscal consolidation and economic recovery.

On the other hand, the Council underlines that the economic fallout from the COVID-19 crisis has led to a significant deviation from the economic assumptions on which that recommendation was based, and it no longer provides a relevant basis for fiscal policy guidance.

The recommendation adopted on June 18 takes into consideration the recent developments and sets the new deadline for the correction of Romania’s excessive deficit as 2024.

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