The European Commission analyzed yesterday morning the convergence programs of Romania and Slovakia, in other words the two states’ preparations for the long-term plan to take up the Euro. The European Commission was very critical of Romania’s financial program, concluding it was not abiding by “the cautious fiscal policy needed for limiting the growth of the foreign deficit and of inflation pressure. The European Commission recommends the government should be more careful about spending public funds.
Joaquin Almunia, the EU Commissioner for economy and currency affairs, opined yesterday that both Romania and Slovakia went through a period of strong economy growth, adding Romania’s flawed growth after the EU accession was a serious concerned. According to the EU official, the counry must set more ambitious budget objectives to avoid breaking the pact of stability and increase and also to restrain the foreign deficit growth and inflation pressure, a risk to macroeconomic and financial stability. (…)
The press release authored by the European Commission yesterday goes that Romania’s budget policy is not in keeping with the convergence program to take up the EU. There is commented that, since Romania’s program predicts great deficits still to come, which may lead tom excessive deficit risks. There is mentioned that Romania’s progress with attaining the average term goal, a deficit under 1% till 2001, are sure not to be enough.
Given the risks concerning budget targets and the significant adjustment needed after the scheduled period, it is little likely that this should be achieved by 2011, because of the way it is planned.
Recommendations from Brussels
In order to help Romania meet the convergence criteria, the European Commission has made a set of recommendations to Romania: reconsider the budget targets for 2008, cut on public expenses and take up policies to limit inflation pressure, improve the planning and the public expense, generally stick to a proper policy on the wages of public administration staff and continue structural reforms.
PM Tariceanu: "What they say is of less interest to me”
Here is the comment made by the Romanian PM Calin Popescu Tariceanu last Tuesday: “What they say is of less interest to me.We are able to handle the deficit and I am going to use all the time we can afford because I want us to invest as much as possible, but not as little as possible.”
It is to be added that, according to the European Commission, Romania is unlikely to balance the budget till 2011, therefore the Commission is requiring ampler deficit cuts in 2008 and the years to follow, as mentioned in a project meant to evaluate Bucharest fiscal program on long term.