Romania officially requires 7-year period to bring public deficit under 3% of GDP

Romanian prime minister Marcel Ciolacu announced that he is asking the European Commission for a 7-year period to reduce the general government budget deficit under 3% of GDP.

Romania has been under the Excessive Deficit Procedure since 2019, but the procedure was suspended during the COVID-19 crisis.

Romania's government is close to accepting that its deficit is heading towards 7% of GDP this year. However, analysts believe this level might be exceeded due to the Pension Law.

"We discussed a new agreement regarding Romania's deficit. We come up with the proposal to have an agreement for a 7-year transition period. We have explained why we want this: because the biggest investments will follow in 2025 and 2026. Resilience Facility's national implementation PNRR has a deadline at the end of 2026 in terms of investments," Ciolacu argued, quoted by Economedia.ro.

At the same time, he said he is also renegotiating the PNRR for a 10% reduction in the loan component.

Regarding the decision to restrict the definition of micro-enterprises by lowering the maximum turnover, a target under the Resilience Facility that the European Commission insists on, PM Ciolacu said that it is "a political decision" to be taken. There are more options, namely lowering the turnover ceiling on the spot, lowering it later along with the fiscal consolidation package next year – or not lowering it at all and accepting the loss of the EU funds related to the target.

(Photo source: Gov.ro)