Recommendation for a COUNCIL RECOMMENDATION with a view to bringing an end to the situation of an excessive deficit in Romania
Date: 2025-06-23
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Romania, budget deficit, budgetary control, economic policy, economic reform, gross domestic product, public debt, public finance, stability pact

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   EUROPEAN COMMISSION  Brussels, 23.6.2025  COM(2025) 344 final  Recommendation for a COUNCIL RECOMMENDATION with a view to bringing an end to the situation of an excessive deficit in Romania   
 
Recommendation for a 

COUNCIL RECOMMENDATION 

with a view to bringing an end to the situation 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(7) thereof, 

Having regard to the recommendation from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

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According  to  Article  126  of  the  Treaty  on  the  Functioning  of  the  European  Union 
(TFEU), Member States shall avoid excessive government deficits. 

The  Stability  and  Growth  Pact 
the  objective  of  sound  and 
sustainable government finances as a means of strengthening the conditions for price 
stability  and  for  strong,  sustainable  and  inclusive  growth  underpinned  by  financial 
stability, thereby supporting the achievement of the Union’s objectives for sustainable 
growth and employment. 

is  based  on 

Romania  has  been  subject  to  an  excessive  deficit  procedure  since  April  2020.  On 
3 April  2020,  the  Council  decided,  in  accordance  with  Article  126(6)  TFEU,  that  an 
excessive deficit existed in Romania due to non-compliance with the deficit criterion 
(1),  and  issued  a  Recommendation  under  Article  126(7)  TFEU  (2)  with  a  view  to 
bringing  an  end  to  the  situation  of  an  excessive  government  deficit  by  2022  at  the 
latest.  

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  (3)  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  (4)  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 
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 

OJ L, 110, 8.4.2020, ELI: http://data.europa.eu/eli/dec/2020/509/oj  
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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(6) 

(7) 

(8) 

(9) 

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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 (5). The plan covered the 
period  from  2025  until  2028  and  presented  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). This recommendation set 
maximum  growth  rates  for  net  expenditure  and  specified  the  set  of  reforms  and 
investments underpinning the extension of the adjustment period to seven years.  

On  21  January  2025,  the  Council  adopted  a  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  path for Romania 
in  accordance  with  Article  3(4)  of  Regulation  (EC)  1467/97  (8)  with  the  following 
maximum  growth  rates  of  net  expenditure(9):  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. 
These were the same annual and cumulative growth rates set in the Recommendation 
endorsing  the  national  medium-term  fiscal-structural  plan  of  Romania.  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 and on 
the implementation of the set of reforms and investments underpinning the extension 
of the adjustment period. 

In 2024 and 2025, net expenditure is growing 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.  On  that  basis,  on  [date]  the  Council  adopted  a  Decision  under 

Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the 
effective coordination of economic policies and on multilateral budgetary surveillance and repealing 
Council Regulation (EC) No 1466/97 (OJ L, 2024/1263, 30.4.2024, ELI: 
http://data.europa.eu/eli/reg/2024/1263/oj. 
Council  Recommendation  of  21  January  2025  endorsing  the  medium-term  fiscal-structural  plan  of 
Romania, OJ C/2025/647, 10.2.2025. ELI: http://data.europa.eu/eli/C/2025/647/oj 
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. 
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, ELI: 
http://data.europa.eu/eli/reg/1997/1467/2024-04-30). 
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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(10) 

Article 126(8) TFEU establishing that no effective action had been taken in response 
to its recommendation of 21 January 2025. 

In  case  of  non-effective  action  by  a  Member  State  with  a  derogation,  Article  126 
TFEU  requires  the  Council  to  adopt  a  revised  recommendation  under  Article  126(7) 
addressed  to  the  Member  State  concerned  with  a  view  to  bringing  the  situation  of 
excessive deficit to an end within a given period. In line with Article 3(4) of Council 
Regulation  (EC)  1467/97,  that  recommendation  is  also  to  establish  a  maximum 
deadline of six months for effective action to be taken by the Member State concerned 
to correct the excessive deficit, which can be reduced to three months when warranted 
by the seriousness of the situation. Furthermore, in its recommendation, the Council is 
to  recommend  that  the  Member  State  adhere  to  a  maximum  growth  rate  of  net 
expenditure as set by a corrective net expenditure path, which ensures that the general 
government deficit is brought and maintained below the 3% of GDP reference value 
within the deadline set in that recommendation. Where the excessive deficit procedure 
was opened on the basis of the deficit criterion, the corrective path is to be consistent 
with a minimum annual structural adjustment of at least 0.5% of GDP as a benchmark 
for the years when the general government deficit is expected to exceed the reference 
value. The Commission may, during a transition period in 2025, 2026 and 2027, adjust 
the  benchmark  to  take  into  account  the  increase  in  interest  expenditure  when  setting 
the proposed corrective path for those years, taking into account recital 23 of Council 
Regulation (EU) 2024/1264.  

(11)  Real GDP in Romania grew by 0.8% in 2024. According to the European Commission 
Spring 2025 Forecast, the economy is expected to grow by 1.4% in 2025, supported by 
a  recovery  in  construction  and  transport  services,  helped  by  membership  of  the 
Schengen area and infrastructure upgrades. In 2026, real GDP is expected to increase 
by  2.2%,  reflecting  the  stronger  absorption  of  funds  under  the  Recovery  and 
Resilience  Facility.  The  unemployment  rate  is  expected  to  reach  5.3%  in  2025  and 
5.2% in 2026. Inflation is set to decrease from 5.8% in 2024 to 5.1% in 2025 and 3.9% 
in 2026. 

(12)  According  to  data  provided  by  Eurostat  on  22  April  202510,  the  general  government 
deficit in Romania stood at 9.3% of GDP in 2024. This is much higher than the 7.9% 
of GDP deficit projection included in Romania’s medium-term fiscal-structural plan of 
October  2024.  The  European  Commission  Spring  2025  Forecast  projects  a  general 
government deficit of 8.6% of GDP in 2025 and 8.4% of GDP in 2026. The structural 
deficit is projected at 7.9% in 2025 and is expected to stay the same in 2026. 

(13)  General  government  debt  stood  at  54.8%  of  GDP  at  end-2024.  According  to  the 
European  Commission  Spring  2025  Forecast,  it  is  projected  to  increase  to  59.4%  of 
GDP  at  end-2025  and  63.3%  of  GDP  at  end-2026,  thus  exceeding  the  60%  of  GDP 
reference value. 

(14)  The  revised  corrective  net  expenditure  path  set  out  in  this  Recommendation,  which 
establishes  maximum  growth  rates  of  net  expenditure,  is  consistent  with  a  minimum 
annual improvement of at least 0.5% of GDP in the structural balance and ensures that 
the  general  government  deficit  is  brought  and  maintained  below  the  reference  value 
within  the  original  correction  deadline  of  2030.  In  order  to  ensure  a  consistent  risk-
based approach and address the deviation from the original path, the corrective path is 

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Eurostat  Euro  Indicators  published  on  22  April  2025.  See:  https://ec.europa.eu/eurostat/web/products-
euro-indicators/w/2-22042025-ap   

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frontloaded, with annual adjustments in the structural primary balance of about 2 pps. 
[per  year]  in  2025  and  2026  and  about  1  pp.  thereafter,  supported  by  key  reforms 
including  the  review  of  the  tax  framework,  and  ensures  that  debt  returns  to  prudent 
levels  below  60%  of  GDP  in  the  medium  term.  Based  on  the  corrective  net 
expenditure path set out in this Recommendation, the European Commission medium-
term  government  debt  projection  framework  and  the  European  Commission  Spring 
2025 Forecast, the general government deficit would decrease from 9.3% of GDP in 
2024 to 2.8% by 2030. The general government debt would continue increasing from 
54.8%  of  GDP  at  end-2024  until  62.3%  at  end-2028  and  then  decrease  to  61.1%  in 
2030. 

(15)  Abiding  by  the  recommended  maximum  growth  rates  of  net  expenditure  set  by  the 
corrective  net  expenditure  path  should  secure  a  lasting  correction  of  the  excessive 
deficit, while concrete measures should be geared towards enhancing the quality and 
composition of the public finances, preserving investment and reinforcing the growth 
potential  of  the  economy.  Reforms  of  a  fiscal  and  broader  economic  nature  should 
improve the growth and resilience potential of the economy in a sustainable manner, 
and support fiscal sustainability.  

(16) 

In this respect, point 2 and Annex II (Set of reforms and investments that underpins an 
extension of the adjustment period to 7 years) of the Council Recommendation of 21 
January 2025 endorsing the medium-term plan of Romania, still apply. These reforms 
and investments will continue being monitored by the Commission under Article 22(1) 
of Regulation 2024/1263. However, given the recent deterioration of Romania’s fiscal 
position relative to the medium-term fiscal-structural plan, the scope of reforms in that 
plan, in particular those that have a more direct bearing on the fiscal outlook and debt 
sustainability,  needs  to  be  upscaled.  The  forthcoming  tax  reform  should  aim  to 
generate additional revenue significantly above the 1.7% of GDP that was envisaged 
in  the  plan.  To  contribute  to  redressing  the  fiscal  situation,  additional  measures  will 
also  be  needed  to  improve  tax  administration  and  collection,  and  to  ensure  a  strict 
control over current expenditure, including public wages. 

(17) 

In line with Article 8(3) of Regulation No 1467/97, a Council decision to abrogate the 
excessive  deficit  procedure  shall  only  be  taken  pursuant  to  Article  126(12)  TFEU 
where the deficit has been brought below the reference value and is projected by the 
Commission to remain so in the current and following year.  

HEREBY RECOMMENDS 

(1) 

(2) 

(3) 

Romania  should  ensure  that  the  nominal  growth  rate  of  net  expenditure  does  not 
exceed the maxima established in Annex I.  

Romania should thus put an end to the excessive deficit situation by 2030. 

The  Council  establishes  the  deadline  of  15  October  2025  for  Romania  to  take 
effective action and present the necessary measures to ensure the timely correction of 
the  excessive  deficit.  Thereafter,  Romania  should  report  on  progress  made  in  the 
implementation  of  this  recommendation  at  least  every  six  months,  in  spring  in  the 
context  of  its  annual  progress  report  and  in  the  autumn  by  15  October,  until  the 
excessive deficit has been corrected. 

This Recommendation is addressed to Romania.  

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ANNEX I 
Maximum growth rates of net expenditure 
(annual and cumulative growth rates, in nominal terms) 
Romania 

Years 

2025 

2026 

2027 

2028 

2029 

2030 

Annual 

2.8 

2.6 

4.6 

4.4 

4.2 

4.0 

Cumulative (*) 

2.8 

5.5 

10.4 

15.2 

20.1 

24.9 

Growth rates 

(%) 

(*) The cumulative growth rates are calculated by reference to the base year of 2024. 

Done at Brussels, 

For the Council 
The President 

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