The EU states Finance ministers Council (ECOFIN) approved on Tuesday, February 16 2010, to extend Romania's deadline to correct the budget deficit until 2010./ Romania needs to adjust the state's budget deficit to fit below 3% of the GDP, an ECOFIN communiqué informs.
"Romania needs to get moving the measures entailed for the 2010 budget, at the same time avoiding another deterioration of the situation and securing a 1.75% of the GDP financial effort for 2010-2012", the communiqué goes on.
The Council took similar measures for Lithuania and Malta. The three countries need to take solid measures until August 16, 2010.
In May 2009, the EC started the procedure for excessive deficit against Romania. In July 2009, ECOFIN approved the EC proposal to begin the excessive deficit procedure in Romania's case, following a fiscal unbalance above 3% of the GDP and recommended to reduce the deficit below this level until 2011 at the latest. The Council's decisions ruled out that the 7 January 2010 was the deadline for solid measures.
In 2009, Romania recorded a 7.2% budget deficit of the GDP, slightly below the annual target set by the stand-by agreement sealed with the IMF, Romanian Finance minister says.
In 2010, Romania aims to reach a 5.9% budget deficit. The budget deficit appears when the Government's spending is higher than incomes. The ideal situation is when the deficit reflects 100% the spending for investments (especially in infrastructure) and to be covered by secure financial resources, as to not resort to inflationist monetary policies.