EU Council: Romania remains in excessive deficit procedure

The Council of the European Union on Friday opened formal procedures against EU member states facing an excessive deficit and decided to keep the existing excessive deficit procedure open in the case of Romania, DPA and Euronews report. France, Italy, Belgium, Hungary, Malta, Poland and Slovakia are the EU member states which got into the procedure of excessive deficit (PDE) and must reduce public expenditure, announced the European Commission recently.In a press release of the EU Council shows that ‘Romania who has been in procedure of excessive deficit since 2020, did not take efficient measures to correct its deficit and, as a result, the procedure should be kept open’. The purpose of the procedure for excessive deficit is that the EU member states to keep their budgets under control. In theory, the procedures can lead to fines, but it has never happened. Following the opening of the procedures, until the end of the year, the EU member states will be asked to approve the EC recommendations regarding the way of solving the issue of deficits within the approved time limit.Out of the member states in procedure of excessive deficit, in 2023, Italy had the highest budgetary deficit (7.4% of GDP), followed by Hungary *6.7% of GDP), Romania (6.6% of GDP), France (5.5%of GDP), Poland (5.1% of GDP), Malta and Slovakia (both with 4.9 of GDP) and Belgium (4.4% of GDP).In April, EU member states adopted new rules governing the level of public debt that an EU country can accumulate and the size of the budget deficit allowed. The new rules keep the debt and deficit limits set in the treaties at 60% and 3% of GDP respectively, but give countries more room for manoeuvre to negotiate their adjustment paths with the European Commission in four-year plans, which can be extended to seven years if they adopt reforms and investment.   There are also common reduction targets to ensure adjustments are not delayed. Countries that exceed the debt ceiling must reduce their debt by one percentage point each year if it exceeds 90% of GDP, and by half a percentage point if it falls below that level. Countries with a deficit of 3% will still have to correct it to 1.5% to have a reserve to fall back on in times of crisis.