President Traian Basescu told the public radio station on Wednesday that in the event that Romania fails to post a budget deficit narrower than in 2008, it runs the risk of being given financial sanctions worth some 700 million euros.
However, he added that when the European Commission triggers the excessive budget procedure, the targeted country should prove, in two or three years, that it regulates this problem before the sanctions are applied.
‘Romania has already done this because we were aware of this issue.
The first part of the procedure means recovery, which we have already applied by the current state budget. If, for example, this year we fail to get a budget deficit lower than in 2008, the effect will be that financial sanctions, fines may be applied, that might start from 0.5 percent of GDP.
This means Romania would get a fine of 700 million euros. Let’s hope we’ll not get to being given fines, but we are now undergoing the deficit procedure’, he explained.
The president said Romania anticipated the fact the European Union executive would trigger the excessive deficit procedure.
‘We knew we ended 2008 in excessive budget deficit at 5.3 percent, which is far above the 3 percent limit set by the Maastricht criteria. We anticipated this matter and even the current budget is built so as to enter the recovery programme, which means the budget gap will be curbed gradually. For example, the current budget deficit is cut from 5.3 percent in 2008 to 4.6 percent’, he explained.
Basescu announced early this week that the EU executive had launched the excessive budget procedure against Romania and that the state budget had difficulties in providing the expenditure it had committed to.