Recommendation for a COUNCIL DECISION establishing that no effective action has been taken by Romania in response to the Council Recommendation of 21 January 2025
Date: 2025-06-04
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Romania, budget deficit, economic policy, economic recovery, economic reform, gross domestic product, public debt, public investment, stability pact, stability programme

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   EUROPEAN COMMISSION  Brussels, 4.6.2025  COM(2025) 619 final  Recommendation for a COUNCIL DECISION establishing that no effective action has been taken by Romania in response to the Council Recommendation of 21 January 2025  
 
Recommendation for a 

COUNCIL DECISION 

establishing that no effective action has been taken by Romania in response to the 
Council Recommendation of 21 January 2025 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, and in particular 
Article 126(8) thereof, 

Having regard to the recommendation from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

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Article  126(1)  of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU) 
provides that Member States are to avoid excessive government deficits. 

The  Stability  and  Growth  Pact  is  a  set  of  rules  based  on  the  objective  of  pursuing 
sound  government  finances  as  a  means  of  strengthening  the  conditions  for  price 
stability  and  for  strong  sustainable  growth  conducive  to  employment  creation.  The 
Stability  and  Growth  Pact  includes  Council  Regulation  (EC)  No  1467/97  of  7  July 
1997  (1)  on  speeding  up  and  clarifying  the  implementation  of  the  excessive  deficit 
procedure, which was  adopted in  order to  further the prompt correction  of excessive 
general government deficits. 
On  3  April  2020,  the  Council  adopted  Decision  (EU)  2020/509  (2)  under  Article 
126(6)  TFEU  on  the  existence  of  an  excessive  deficit  situation  in  Romania  due  to  a 
planned  non-compliance  with 
issued  a 
Recommendation under Article 126(7) TFEU (3) with a view to bringing an end to the 
situation of an excessive government deficit by 2022 at the latest.  

the  deficit  criterion 

in  2019,  and 

On  18  June  2021,  in  light  of  the  deep  contraction  in  economic  activity linked  to  the 
COVID-19  pandemic,  the  Council  adopted  a  revised  Recommendation  (4)  under 
Article 126(7) TFEU, thereby recommending that Romania put an end to the excessive 
deficit situation by 2024 at the latest.  
On  26  July  2024,  the  Council  adopted  Decision  (EU)  2024/2130  (5)  under  Article 
126(8)  TFEU,  thereby  deciding  that  Romania  had  not  taken  effective  action  in 
response to the Council Recommendation of 18 June 2021. The Council Decision of 

Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation 
of the excessive deficit procedure (OJ L 209, 2.8.1997, p. 6). 
Council Decision (EU) 2020/509 of 3 April 2020 on the existence of an excessive deficit in Romania 
(OJ L 110, 8.4.2020, p. 58) 
Council Recommendation (EU)  2020/C 116/01 of 3 April 2020 with a view to bringing an end to the 
situation of an excessive government deficit in Romania (OJ C 116, 8.4.2020, p. 1–3). 
Council Recommendation (EU) 2021/C 304/24 of 18 June 2021 with a view to bringing an end to the 
situation of an excessive government deficit in Romania (OJ C 304, 29.7.2021, p. 111–115). 
Council Decision (EU) 2024/2130 of 26 July 2024 establishing that no effective action has been taken 
by Romania in response to the Council Recommendation of 18 June 2021 (OJ L, 2024/2130, 1.8.2024). 

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26  July  2024  took  into  account  that  the  next  step  in  the  excessive  deficit  procedure, 
namely  a  revised  Council  recommendation  under  Article  126(7)  TFEU  on  the 
correction  of  the  excessive  deficit,  would  take  place  after  the  submission  of  the 
national medium-term fiscal-structural plan in accordance with Articles 11 and 36(1), 
point (a) of Regulation (EU) 2024/1263. 

On  25  October  2024,  Romania  submitted  its  first  national  medium-term  fiscal-
structural plan, as required under Regulation (EU) 2024/1263. ￼The plan covers the 
period from 2025 until 2028 and presents a fiscal adjustment spread over seven years. 
On  21  January  2025  the  Council  adopted  a  recommendation  endorsing  the  national 
medium-term fiscal-structural plan of Romania (6). 

On  21  January  2025,  the  Council  adopted  another  revised  Recommendation  under 
Article 126(7) TFEU recommending that Romania put an end to the excessive deficit 
situation by 2030(7). The Council recommended a corrective net expenditure (8) path 
for  Romania  in  accordance  with  Article  3(4)  of  Regulation  (EC)  1467/97  with  the 
following  maximum  growth  rates  of  net  expenditure:  5.1%  in  2025,  4.9%  in  2026, 
4.7% in 2027, 4.3% in 2028, 4.2% in 2029, and 3.9% in 2030, which correspond to the 
maximum cumulative growth rates calculated by reference to 2023 of 20.2% in 2025, 
26.0%  in  2026,  31.9%  in  2027,  37.6%  in  2028, 43.3%  in  2029,  and  49.0%  in  2030. 
The  Council  established  a  deadline  of  30  April  2025  for  Romania  to  take  effective 
action  and  to  present  the  necessary  measures  together  with  its  2025  annual  progress 
report, to be submitted to the Commission in accordance with Article 21 of Regulation 
(EU) 2024/1263. 

To  date,  Romania  has  not  submitted  its  annual  progress  report  on  action  taken  in 
response to the Council recommendation of 21 January 2025 with a view to bringing 
an end to the situation of an excessive deficit and on the implementation of the set of 
reforms and investments underpinning the extension of the adjustment period. 

An  assessment  of  the  action  taken  by  Romania  in  response  to  the  Council 
Recommendation  of  21  January  2025  leads  to  a number  of  conclusions  listed 
hereafter. This assessment is carried out on the basis of outturn data from Eurostat, the 
Commission Spring 2025 Forecast and other information available to the Commission. 

(6) 

(7) 

(8) 

(9) 

(10)  Based  on  the  budgetary  outcome  data  notified  by  Romania  and  validated  by  the 
Commission  (Eurostat)  and  on  the  Commission’s  calculations,  net  expenditure  grew 
by  19.9%  in  2024.  According  to  the  Commission  2025  Spring  forecast,  net 
expenditure  is  projected  to  grow  by  5.4%  in  2025,  thus  above  the  recommended 
maximum of 5.1% as set out in the Council Recommendation of 21 January 2025. As 
a  ratio  to  GDP,  the  deviation  between  the  net  expenditure  growth  rate  forecast  for 
2025  and  the  recommended  maximum  amounts  to  0.1%  of  GDP.  Considering  2024 
and 2025 together, the cumulative growth rate of net expenditure for 2024 and 2025 is 

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Council  Recommendation  of  21  January  2025  endorsing  the  medium-term  fiscal-structural  plan  of 
Romania, OJ C/2025/647, 10.2.2025. 
All documents related to the excessive deficit procedure of Romania can be found at: https://economy-
finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact/corrective-arm-
excessive-deficit-procedure/excessive-deficit-procedures-overview/romania_en. 
Net expenditure is defined in Article 2(2) of Regulation (EU) 2024/1263 as government expenditure net 
of (i) interest expenditure, (ii) discretionary revenue measures, (iii) expenditure on programmes of the 
Union  fully  matched  by  revenue  from  Union  funds,  (iv) national  expenditure  on  co-financing  of 
programmes funded by the Union, (v) cyclical elements of unemployment benefit expenditure, and (vi) 
one-off and other temporary measures.  

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forecast  by  the  Commission  to  be  26.4%,  thus  above  the  recommended  maximum 
cumulative growth of 20.2% as set out in the Council Recommendation of 21 January 
2025. As a ratio to GDP, the deviation between the cumulative net expenditure growth 
for  2024  and  2025  and  the  recommended  maximum  amounts  to  1.7%  of  GDP.  The 
deviation is largely driven by high growth in government current expenditure in 2024, 
which  rose  by  18.7%  relative  to  2023,  most  notably  a  21.5%  increase  in  the  public 
sector wage bill and a 19.5% rise in social transfers (including pensions). 

(11)  Due  to  the  high  growth  rate  of  net  expenditure  in  2024,  Romania’s  general 
government  deficit  increased  to  9.3%  of  GDP,  from  6.6%  of  GDP  in  2023  and  well 
above  the  planned  7.9%  of  GDP  notified  by  Romania  in  autumn  2024.  The 
Commission Spring 2025 forecast projects the general government deficit to decrease 
to 8.6% of GDP in 2025. The projected decline in the deficit in 2025 mainly reflects 
the implementation of a fiscal consolidation package at the end of 2024. This package 
included  a  nominal  freeze  in  wages  and  pensions  and  some  additional  revenue-
enhancing  measures,  including  the  removal  of  fiscal  facilities  granted  to  various 
sectors. However, the  review of the tax  framework, included in Romania’s medium-
term  fiscal-structural  plan  and  key  to  achieving  the  budgetary  targets  in  2025  and 
2026,  did  not  enter  into  force  by  1  April  2025  at  the  latest,  as  recommended  by  the 
Council  Recommendation  of  21  January  2025  endorsing  the  medium-term  fiscal-
structural plan of Romania. The public debt-to-GDP ratio increased from 48.9% at the 
end of 2023 to 54.8% of GDP at the end of 2024 and is projected by the Commission 
to increase to 59.4% by the end of 2025, driven by high government deficits. 

(12)  Therefore,  the  response  of  Romania  to  the  Council  Recommendation  of  21  January 
2025 has  been insufficient.  Net  expenditure grew much faster than recommended by 
the Council. This leads to a persistent high government deficit, putting at risk a timely 
correction of the excessive deficit by 2030. There are no mitigating ‘relevant factors’ 
to be considered in the excessive deficit procedure that would change this assessment, 
while  the  high  medium-term  fiscal  sustainability  risks  that  Romania  faces  are  an 
aggravating factor. 

HAS ADOPTED THIS DECISION:  

Romania  has  not  taken  effective  action  in  response  to  the  Council  Recommendation  of 
21 January 2025. 

Article 1 

This Decision is addressed to Romania. 

Done at Brussels, 

Article 2 

For the Council 
The President 

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