The European Commission could ask Romania to reduce its budget deficit by means of the excessive deficit procedure if the Government does not take steps to limit the budget deficit by May. "As the financial affairs commissioner Jose Almunia has said, unless concrete steps are taken for 2008, i.e. economic measures that allow for budget expenditures to be forecast more clearly, the European Commission does not rule out the implementation of the excessive budget deficit procedures. I hope it will not be the case," Leonard Orban (photo), Minister of Transport, told ZF in an interview at the end of last week. Under the accession treaty, Romania has vowed to adopt the euro in 2013, and therefore must meet the convergence criteria, which include a budget deficit of less than 3% of the GDP. Romania had a budget deficit of 2.5% of the GDP last year, whilst the Government has committed to a 2.7% deficit this year. The problem lies in the fact that the Government was engaged in excessive spending in the last two months of 2007, which caused the budget to move from surplus to deficit, and undermined the trust of European officials towards Romania's targets. "The excessive deficit procedure applies to all member states in the eurozone, which have to comply with the Stability Pact, as well as to new member states, which have adopted convergence programmes," added Orban.
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