Recommendation for a COUNCIL DECISION abrogating Decision 2009/590/EC on the existence of an excessive deficit in Romania
Date: 2013-05-29
Institutions: European Commission
Subjects: Romania, budget deficit, budgetary equilibrium, stability pact, tax reform

EUROPEAN 
COMMISSION 

Brussels, 29.5.2013  
COM(2013) 395 final 

Recommendation for a 

COUNCIL DECISION 

abrogating Decision 2009/590/EC on the existence of an excessive deficit in Romania 

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Recommendation for a 

COUNCIL DECISION 

abrogating Decision 2009/590/EC on the existence of an excessive deficit in Romania 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 126(12) thereof, 

Having regard to the recommendation from the Commission, 

Whereas:  

(1) 

(2) 

(3) 

By Council Decision 2009/590/EC of 7 July 20091, following a recommendation from 
the  Commission  in  accordance  with  Article 104(6)  of  the  Treaty  establishing  the 
European  Community  (TEC),  it  was  decided  that  an  excessive  deficit  existed  in 
Romania.  The  Council  noted  that  the  general  government  deficit  reached  5.4  %  of 
GDP  in  2008,  thus  above  the  3%  of  GDP  Treaty  reference  value,  while  the  general 
government  gross  debt  was  13.6%  of  GDP,  well  below  the  60%  of  GDP  Treaty 
reference value2.  

On  7  July  2009,  in  accordance  with  Article 104(7)  TEC  and  Article  3(4)  of  Council 
Regulation  (EC)  No  1467/97  of  7  July  1997  on  speeding  up  and  clarifying  the 
implementation  of  the  excessive  deficit  procedure3,  the  Council,  based  on  a 
recommendation from the Commission, addressed a recommendation to Romania with 
a view to bringing the excessive deficit situation to an end by 2011 at the latest. The 
recommendation was made public. 

On  12  February  2010,  in  accordance  with  Article 126(7)  of  the  Treaty  on  the 
Functioning  of  the  European  Union  (TFEU)  and  Article  3(4)  of  Council  Regulation 
(EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of 
the  excessive  deficit  procedure,  the  Council,  based  on  a  recommendation  from  the 
Commission, acknowledging that the Romanian authorities had taken effective action 
in compliance with the Council Recommendation of 7 July 2009 and that unexpected 
adverse  economic  events  with  major  unfavourable  consequences  for  government 
finances  had  occurred  in  Romania,  addressed  a  revised  recommendation  to  Romania 

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2 

3 

OJ L 202, 4.8.2009, p. 48-49. 
The general government deficit and debt for 2008 were subsequently revised to currently 5.8% of GDP 
and 13.4% of GDP respectively. 
OJ L 209, 2.8.1997, p. 8.  

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with a view to bringing the excessive deficit situation to an end by 2012 at the latest. 
This recommendation was made public. 

(4) 

In  accordance  with  Article  4  of  the  Protocol  on  the  excessive  deficit  procedure 
annexed to the Treaties, the Commission provides the data for the implementation of 
the procedure. As part of the application of this Protocol, Member States are to notify 
data  on  government  deficits  and  debt  and  other  associated  variables  twice  a  year, 
namely before 1 April and before 1 October, in accordance with Article 3 of Council 
Regulation (EC) No 479/2009 of 25 May 2009 on the application of the Protocol on 
the  excessive  deficit  procedure  annexed  to  the  Treaty  establishing  the  European 
Community4.  

(5)  When considering whether a decision on the existence of an excessive deficit should 
be  abrogated,  the  Council  should  take  a  decision  on  the  basis  of  notified  data. 
Moreover, a decision on the existence of an excessive deficit should be abrogated only 
if  the  Commission  forecasts  indicate  that the  deficit  will  not  exceed  the  3%  of  GDP 
threshold over the forecast horizon5. 

(6) 

Based on data provided by the Commission (Eurostat) in accordance with Article 14 
of Regulation (EC) No 479/2009 following the notification by Romania before 1 April 
2013 and on the Commission services’ 2013 spring forecast, the following conclusions 
are warranted: 

– 

– 

The larger-than-expected recession in 2009 resulted in a significant shortfall in 
government  revenue,  which  pushed  the  general  government  deficit  to  9%  of 
GDP  despite  efforts  to  reduce  government  expenditure.  Following  this 
unexpected development and the extension of the deadline for the correction of 
the  excessive  deficit  by  one  year,  the  general  government  deficit  was 
subsequently reduced to 6.8% of GDP in 2010, to 5.6% of GDP in 2011 and to 
2.9% of GDP in 2012, which is below the 3% of GDP Treaty reference value. 
The  correction  of  the  deficit  has  been  driven  mainly  by  strict  control  of 
expenditure growth, including through control of the public sector wage bill, a 
freeze in pensions and a reduction in all social benefits except pensions. It was 
also supported by revenue measures such as an increase in the VAT rates by 5 
percentage points and a broadening of the personal income tax base. The fiscal 
adjustment  was  implemented  in  the  context  of  two  consecutive  economic 
adjustment programmes supported by balance-of-payments assistance. 

The  2013  convergence  programme  projects  the  deficit  to  continue  falling  to 
2.4% of GDP in 2013 and 2.0% of GDP in 2014. In the Commission services' 
2013 spring forecast, the general government deficit is projected to decrease to 
2.6%  of  GDP  in  2013  and  to  2.4%  of  GDP  in  2014,  based  on  a  no-policy-
change assumption, which remains below the Treaty reference value.  

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5 

OJ L 145, 10.6.2009, p. 1.  
In line with the “Specifications on the implementation of the Stability and Growth Pact and Guidelines 
on the format and content of Stability and Convergence Programmes” of 3 September 2012. See: 
http://ec.europa.eu/economy_finance/economic_governance/sgp/pdf/coc/code_of_conduct_en.pdf  

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– 

The  Commission  services'  2013  spring  forecast  projects 
the  general 
government  gross  debt  to  increase  slightly  from  37.8%  of  GDP  in  2012  to 
38.5% of GDP in 2014.  

(7) 

(8) 

(9) 

The Council recalls that, starting from 2013, which is the year following the correction 
of the excessive deficit, Romania should progress towards its medium-term objective 
at an appropriate pace, including respecting the expenditure benchmark.  

In accordance with Article 126(12) of the Treaty, a Council Decision on the existence 
of  an  excessive  deficit  is  to  be  abrogated  when  the  excessive  deficit  in  the  Member 
State concerned has, in the view of the Council, been corrected.  

In  the  view  of  the  Council,  the  excessive  deficit  in  Romania  has  been  corrected  and 
Decision 2009/590/EC should therefore be abrogated, 

HAS ADOPTED THIS DECISION: 

From an overall assessment it follows that the excessive deficit situation in Romania has been 
corrected. 

Article 1 

Decision 2009/590/EC is hereby abrogated. 

Article 2 

Article 3 

This Decision is addressed to Romania. 

Done at Brussels,  

For the Council 
The President 

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