The European Commission estimates a budget deficit of 7% for our country

George Marinescu
English Section / 21 martie

Photo source: facebook/European Commission

Photo source: facebook/European Commission

Versiunea în limba română

The budget deficit of our country, instead of decreasing, will increase, the representatives of the European Commission said yesterday in Bucharest, during an event in which the implementation of the National Recovery and Resilience Plan in the last year was evaluated.

Declan Costello, Deputy Director General for Economic and Financial Affairs DG ECFIN, said: "We are very concerned about the fiscal situation in Romania. The deficit should have been corrected by this year. The last time we looked at the numbers last year, we were expecting a deficit of more than 6% and it was supposed to go down this year. We see that the trend is going in the wrong direction. Deficit execution in the first part of the year is weak. Right now, I expect the deficit to be closer to 7% of GDP this year. The fiscal deficit combined with the current account deficit is worrying and represents a threat for Romania in the future. Romania needs a credible fiscal plan in the medium term, with a fiscal reform. There is a need to reduce the threshold for micro-enterprises".

The representatives of the European Commission were also dissatisfied with the implementation of the PNRR, especially because due to the delays in reaching the targets and milestones, the Community Executive has not yet released the funds allocated for payment request no. 3, a request that was submitted by the Government in the last month of last year. Celine Gauer, general director of SG RECOVER stated that many investments provided for in Romania's PNRR are delayed, and some are not even started and warned that any milestone not met on time means that Romania will not receive the money related to that investment.

Celine Gauer stated: "This is a completely different story to the cohesion funds. Any payment request not submitted, any milestone not reached by August 2026 will not be paid. My message is one of urgency and a call for support. If we talk about reforms, we have seen very important reforms adopted: anti-corruption, energy. Important, they must be maintained over time. But what do we have before us? Essential reforms, especially in the tax field. Romania is in a situation of excessive deficit, which will not disappear. So this problem, the challenge of the country is not going away, it will be there, it must be addressed and the reforms included in the fiscal reform plan, which are in the plan this year, must definitely address these problems. We only have 29 months left - a very short time if you have to implement 400 milestones and targets. 2026 isn't going away, it's getting closer. Any payment request that will not be sent until August 2026, so 29 months, any milestone and target that will not be achieved until August 2026 will translate into a loss for Romania and maybe even the return of certain funds".

Despite the warnings issued by the representatives of the European Commission, Adrian Câciu - the Minister of Investments and European Projects - stated that Romania's situation is comparable to that of other European states and that for now there is no risk of returning the money received from the EU budget.

Adrian Câciu stated: "We have contracted investments of 36 billion euros, they must continue and carry out the execution of these investments. It is no longer about contracting, we have contracts, they just need to be implemented".

Regarding the problems at the moment, the minister said that there are four milestones "under discussion", mentioning corporate governance and the ceiling for micro-enterprises.

Adrian Câciu pointed out: "It is the milestone with corporate governance, which belongs to the General Secretariat of the Government, but, obviously, today there will be technical discussions with the General Secretariat of the Government. Corporate governance refers to the way in which the boards of state companies are selected, on the one hand, on the other hand, at AMEPIP I understand that there are no more problems, but today we have the technical clarification with the Commission's experts. Not us, from the Ministry of European Funds, but those from SGG will be present. They are energy milestones. We have payment request number two, which must be closed, on the one hand, but also the corporate governance of the energy companies. It is the milestone with micro-enterprises that we consider accomplished. The Commission has a number of observations regarding the ceiling up to which a micro-enterprise must be considered a micro-enterprise".

He mentioned that the reforms in the PNRR must keep their purpose, and the way in which a reform is applied is a contextualized way, and he believes that there has been progress regarding the implementation of the PNRR in the last year: "On the one hand, the contracting (...) related to the Plan National Recovery and Resilience Fund, amounts to 21 billion euros. But we have contracts for investments of 36 billion euros. It is imperative that these contracts happen within the period until 2026, until August, in order to be supported financially, for that they do not create a problem in the fiscal-budgetary area. And here we work closely, and our mission is not singular, it is together with the European Commission, with all the reform coordinators, to accelerate the speed of making investments. On the other hand, the implementation of the National Recovery and Resilience Plan must be done with realism and pragmatism. It was a critical situation last year when we amended the National Recovery and Resilience Plan: why did certain elements of the original Plan disappear? Because they could not be done in the time available. It does not mean that they will not be realized with other funds, if we find in the Collision Policy or attracted funds".

The Minister of Investments and European Projects stated that our country has 9.4 billion euros in its account, which means that we have already received 33.1% of the funds allocated through the PNRR, of which approximately 2 billion euros have been spent, which means that almost 20% of the money received is also money absorbed.

We remind you that the Ministry of European Investments and Projects submitted to the European Commission on December 15, 2023 the third request for payment within the PNRR, a request with a total value of nearly 2.67 billion euros (about 1.86 billion euros in the form of grants and 811 million euros in the form of loans) and covers a total of 74 targets/milestones related to quarter III 2022 and quarter IV 2022.

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