|Author (Corporate)||European Commission: DG Economic and Financial Affairs|
|Series Details||COM (2020) 752|
Communication published by the European Commission on 18 November 2020 concerning the financial and fiscal situation in Romania.
Romania has been under the Excessive Deficit Procedure (EDP) since April 2020 due to a breach of the deficit threshold in the previous year. The related Council Recommendation noted that the excessive deficit position was the result of policy decisions adopted by the country before the COVID-19 (coronavirus) outbreak. However, a Communication published in May 2020 highlights the gravity of the economic downturn resulting from the pandemic, which had resulted in exceptional uncertainty, making it particularly difficult to design a credible path for fiscal policy. The report published by Romanian authorities in response to the Council Recommendation in September 2020 further pointed to a major deterioration of public finances throughout the year.
The 2021 Annual Sustainable Growth Strategy indicated that the general escape clause of the Stability and Growth Pact (SGP) - activated in March 2020 - should also remain active in 2021. The clause does not suspend the procedures of the SGP. However, its activation has consequences for the corrective arm of the Pact. In the light of the continued exceptional uncertainty created by the COVID‑19 pandemic and its extraordinary macroeconomic and fiscal impact, the Commission considers that no decision on further steps in the Romania’s EDP can be taken at this juncture.
|Subject Categories||Economic and Financial Affairs|
|Subject Tags||Economic Governance | Situation|
|Keywords||Stability and Growth Pact [SGP]
|Countries / Regions||Romania|
|International Organisations||European Union [EU]|