Acting FinMin Citu says PSD gov'ts ignored deficit warnings from European Commission

The warnings regarding the structural deficit and the government deficit coming from the European Commission (EC) for three years were ignored by the Social Democratic Party (PSD) governments, acting Finance Minister Florin Citu told a news conference on Friday after the publication of an EC report showing that the opening of an excessive deficit procedure against Romania is warranted.

"The report tells me that the three-year warnings of the European Commission regarding the structural deficit and the government deficit were ignored by the PSD government. That is there. The EC shows what Standard & Poor's was saying about the deficit, but also that the negative outlook was reduced, and these are related to the budget implementation of 2019 and why it happened until 2019 with those unsustainable expenses. We mentioned that in the budget report. Under the initial budget approved for last year increases in pay and investment expenses based on far too optimistic targets for collecting the government revenues were included. We are talking about 21 billion lei planned since the beginning of the year," said Citu.

He said that the EC report also underlines that in 2017 budget deficit adjustments were requested twice a year, as well as in 2018, but those things were systematically ignored by the previous governments.

"If the PSD governments had taken action starting in 2017, we would not have been in this situation in 2019, and in 2020 we would have not entered into the excessive deficit procedure. For three years, that did not happen," he added.

The European Commission released a report on Friday indicating about Romania that "overall, the analysis suggests that the deficit criterion as defined in the Treaty and in Regulation (EC) No 1467/1997 should be considered as not complied with, and that an excessive deficit procedure (EDP) is thus warranted."

"According to the Fiscal Strategy of the government, the headline general government deficit in 2019 is planned to have increased to 3.8% of GDP, above and not close to the 3% of GDP Treaty reference value," reads the report.

The next step is the EC's Economic and Financial Committee (EFC) expressing an opinion within the next two weeks.