The Country-specific Recommendations are documents prepared by the European Commission for each country, analysing its economic situation and providing recommendations on measures it should adopt over the coming 12 months. They are tailored to the particular issues the Member State is facing and cover a broad range of topics: the state of public finances, reforms of pension systems, measures to create jobs and to fight unemployment, education and innovation challenges, etc. The final adoption of Country-specific Recommendations prepared by the Commission is done at the highest level by national leaders in the European Council.
After two years of decline, real GDP in Romania is estimated to have grown in 2011 by 2½%. For 2012, on the back of a slowdown in Europe, growth is expected to slowdown to 1.4 %; domestic demand is forecast to be the major driver of growth and investment, supported by improving EU funds absorption, is expected to play a key role in 2012.
In the context of the EU's precautionary medium term financial assistance agreed in 2011 for two years, Romania has undertaken to implement a comprehensive economic-policy programme with a particular focus on structural reform measures aimed at improving the functioning of labour and product markets and at increasing the resilience and growth potential of the Romanian economy. In parallel, the programme ensures the continuation of fiscal consolidation, the reform of the tax administration and improvements in public financial management and control as well as financial-stability and financial-market reform.
The results of the second formal programme review that took place in late April-early May 2012 are satisfactory and the current precautionary financial assistance programme remains on track. The cash fiscal target for 2011 was met, while the ESA target would have been met had there not been a sizeable one-off measure linked to court decisions obliging the government to pay compensation to certain categories of employees. The 2012 budget remains on track to achieve a deficit below 3 % of GDP in ESA terms. The authorities will also have to continue implementing sound fiscal policies. The Romanian banking sector has remained resilient, in spite of the on-going deterioration in asset quality. Progress in key structural reform areas has been uneven but overall satisfactory. In particular, reforms in the energy sector have recently gathered momentum. Programme implementation could, however, be improved in several areas.
Concerning the national targets under the Europe 2020 strategy, Romania has made limited progress in 2011. Some of the targets remain difficult to reach. This is the case in particular for investments in R&D, the employment rate, the early school leaving rate and the number of people at risk of poverty or exclusion. Romania should step up efforts to accelerate the delivery of the Europe 2020 strategy as the basis for any new growth initiative
Implement the measures laid down in Decision 2009/459/EC, as amended by Decision2010/183/EU, together with the measures laid down in Decision 2011/288/EU and further specified in the Memorandum of Understanding of 23 June 2009 and its subsequent supplements, and in the Memorandum of Understanding of 29 June 2011 and its subsequent supplements.
Memorandum of understanding between the European Union and Romania
All Member States have committed to the Europe 2020 strategy. However, each country has different economic circumstances and translates the overall EU objectives into national targets in its National Reform Programme – a document which presents the country's policies and measures to sustain growth and jobs and to reach the Europe 2020 targets. The National Reform Programme is presented in parallel with its Stability/Convergence Programme, which sets out the country's budgetary plans for the coming three or four years.