Romania might exit excessive fiscal deficit procedure in May-Jun-govt official.

By bne IntelliNews January 23, 2013
Romania has to notify the European Commission that its 2012 ESA fiscal deficit dropped below the 3%/GDP threshold, if final data confirm the preliminary estimates, and the Commission might as a result take the country out of the excessive fiscal deficit procedure in May-Jun, news agency Mediafax announced, quoting state secretary at the finance ministry Catalin Doltu as saying. He was speaking on Jan 22 after attending a European Council meeting in Brussels. Romania will have to also assure the Commission that the fiscal consolidation continues, Doltu added. The commission will analyse on its turn whether the country's fiscal gap is likely to remain sustainable under 3% of GDP. Romania entered the procedure in 2009 after its budget deficit hit 5.4% of GDP in 2008. At the end of last year, 20 of the 27 EU countries were under excessive fiscal deficit procedures. IntelliNews Comment : The sustainable fiscal consolidation is supported by broad procedures enforced under the past agreement [2009-2011] with the IMF - including an independent fiscal council, a law on fiscal responsibility and mandatory medium-term fiscal projections. Nonetheless, the best fiscal practices and even the legal stipulations are often breached by the government. The fiscal council's recommendations are often ignored by the government, fiscal adjustments are not given a six-month lag before enforcement and the medium-term fiscal projections are not exactly realistic. Nonetheless, the government's commitment to observe the budget deficit targets has been and remains sound, even if the best fiscal practices might not always be observed.

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