19 mai, 2024

5 martie, 2017

Foto: Valdis Dombrovskis (left) and Pierre Moscovici

The Vice-President of the European Commission Valdis Dombrovskis and the Commissioner for Economic and Financial Affairs Pierre Moscovici sent the Minister of Finance, Viorel Stefan, a letter stating that by the launch of the Commission Spring Forecast (April 2017), the Government should „credibly” announce the measures aimed to bring the budget deficit back within the target set under the Stability and Growth Pact.

The Commission’s estimations significantly differ from those of the Government in terms of the main directions of the 2017 state budget and the forecasts for 2018: for 2017, Grindeanu government announced, for example, a deficit of 2.96% of GDP, while the Commission estimates that it will reach 3.6% of GDP.

Noteworthy: estimations of the 2017 Winter Forecast shall be based on the 2016 data and, attention, made by applying the „no policy changing” principle meaning that nothing changes.

The current ruling parties have already amended the tax legal framework – certain specific measures being considered by the Commission, and have included measures in the government program that will further adjust this framework.

Commissioner Pierre Moscovici publicly announced at a press conference organized for the launch of the „European Semester” report – the winter package on the progress made by member states in the social and economic fields, that he sent the letter to the Government from Bucharest, without providing any further details.

Below, the letter of the European officials obtained by cursdeguvernare.ro (the highlights from the text belong to the newsroom):

Dear Minister,

The Commission has recently published its 2017 Winter Forecast, which includes budgetary projections for Romania. The Commission estimates Romania’s general government deficit for 2016 to have sharply increased, compared to the previous year, to 2.8% of GDP. It also forecasts the deficit at 3.6% of GDP in 2017 and 3.9% of GDP in 2018.

On this basis, there is a clear risk, based on the Commission forecasts for 2017 and 2018, that the deficit criterion in the sense of the Treaty and Council Regulation (EC) No 1467/97 of 7 July 1997 will not be fulfilled. Furthermore, Romania is estimated to have significantly deviated from its medium-term budgetary objective (MTO) in 2016, while the Commission forecast points to further deterioration of the structural balance in 2017 and 2018.

These adverse fiscal developments mainly stem from fiscal easing that includes a number of tax cuts combined with increases in wages and pensions.

The Commission will reassess Romania’s compliance with its obligations under the Stability and Growth Pact on the basis of the Commission 2017 Spring Forecast, including the budgetary data for 2016, as validated by Eurostat in April, and Romania’s forthcoming Convergence Program, which is expected before mid-April. It will be important that the necessary measures to ensure compliance with the deficit criterion and with the adjustment path towards the MTO are credibly announced by that time.

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