EC criticizes Romania on economic policies, justice reform

The European Commission urged Romania to adopt measures for correcting its budget deficit and warned that the political evolutions in the last year have generated doubts about the irreversibility of the progress in reforming the judiciary and fighting top-level corruption. “For the first time since the creation of the single currency, all euro area countries will have a deficit below 3% of GDP in 2018. It has taken years of responsible fiscal policies to bring EU countries to this point, and we must ensure that responsibility remains the name of the game in the future too. That's why we address a strong message to Hungary and Romania that they should take action to this year and next to correct a significant deviation from their fiscal targets. Prevention is better than cure, and the time to prevent serious problems from emerging is now that the economy is strong,” said the European Commissioner for Economic and Financial Affairs Pierre Moscovici. The EC also recommended a European Council decision to take note that Romania hasn’t taken any action to correct its budget deficit despite previous recommendations from the Commission. Romania plans to increase budget spending by 10.8% this year, way above the 3.3% growth recommended by the EC, and the structural deficit is set to reach 3.8% of the GDP, according to the EC document. The European Commission also recommended that the Council issues a second warning to Romania on this matter. The European Commission’s country specific recommendations also point out that Romania’s justice reform hasn’t made too much progress in judiciary reform. “Judicial independence is being challenged and pressure being put on the judicial institutions and on the legal framework for fighting corruption, while progress on remaining challenges is being further held back.” The EC also has three recommendations for Romania, namely to reduce its budget deficit and strengthen tax collection, complete the minimum inclusion income reform, and increase the predictability of decision-making, improve preparation and prioritization of large infrastructure projects, improve public procurement transparency and efficiency and strengthen corporate governance in state-owned companies. Romania’s Foreign Affairs Ministry reacted to the EC report stating that Romania is not among the EU state with macroeconomic imbalances and that the number of specific country recommendations for Romania has dropped from eight in 2013 to three in 2018, showing the country’s progress in addressing these recommendations. Romania records EUR 1.18 bln budget deficit in two months editor@romania-insider.com