The European Commission may sanction Romania if prospects included in its spring prognosis come true, European Budget Commissioner Joaquin Almunia has said, quoted by the NewsIn news agency. The spring prognosis of the EC published May 7 says that in 2007 and 2008 Romania’s budget deficit may exceed the 3% of the GDP threshold set by EU rules.
Romanian officials forecast a budget deficit of only 2.8% this year, however.
If the EC forecast proves true, the country risks facing the excessive deficit procedure used by the EC to sanction any EU member state that fails to comply with the 3% threshold. For eurozone countries, this procedure means considerable fines, while non-euro countries including Romania risk losing part of regional assistance funds.
In its today report, the EC says it expects the Romanian GDP to rise 6.3% in 2008, down from the 7.7% boost in 2006. It also expects the annual inflation rate for 2008 to stay at 4.5% and a decrease of the unemployment rate.