The European Commission, under the Semester Package published on November 25, included Romania among the 19 of the 27 EU countries with compliant fiscal developments and prospects, based on the Report on action taken, submitted by the Romanian authorities on October 16.
For nine Member States, including Romania, the Excessive Deficit Procedure (EDP) is held in abeyance, meaning that no further procedural steps are taken at this stage, but that the ongoing procedure remains open and the Member States remain bound by the respective Council recommendation.
The Commission will reassess the situation for these countries next spring, when outturn data for 2025 becomes available.
“It is a positive assessment by the European Commission. We have a confirmation that there is no longer a risk of losing European funds,” explained finance minister Alexandru Nazare.
The decision that temporarily waives sanctions under the Excessive Deficit Procedure (EDP) for Romania meets the consensus expectations that have improved after the EcoFin received on July 8 a first package of measures legislated by the new government in Bucharest, after the country repeatedly failed for years to address the issues and report to the Commission. But the lack of details and the frugal communication may indicate the European Commission is further raising the expectations for the fiscal and budgetary conduct of the Romanian authorities, after a more cooperative approach with the newly formed government during the summer.
The decision indicates that the European Commission is relaxing its guidance provided in June for the construction of the first package of budgetary measures, which is now seen as the main (and the sole, so far) driver for the fiscal consolidation in 2026. This places greater responsibility on the ruling coalition, which still struggles to reach an agreement and to promote the second package of budgetary measures.
By assuming a 6.2% of GDP public deficit in 2026 based on only the first package of measures, the European Commission sets a high target for the government of Romania, which still has to wait for the Constitutional Court’s ruling on some fiscal measures before drafting the 2026 budget plan.
The 11-page report, tagged “Anexa,” submitted by Romania on October 16 and available only in Romanian, included in the Semester Package as received from Bucharest, is particularly frugal. This may be the annual report Romania failed to deliver by April 15 under the Excessive Deficit Procedure (EDP).
No revised Medium-Term Fiscal-Structural Plan (MTFSP), supposed to replace the detailed 21-page Plan submitted in October and endorsed by the Commission on January 21, is attached to Anexa, according to the information available publicly.
iulian@romania-insider.com
(Photo source: Cosmin Iftode/Dreamstime.com)
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