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xtension of the adjustment period, the plan describes policy intentions concerning other investments to respond to some of the challenges identified in the context of the European Semester, especially the CSRs, including those pertaining to the MIP, and to address the common priorities of the EU. (40) Concerning the common priority of a fair green and digital transition, including the climate objectives set out in Regulation (EU) 2021/1119, the plan includes reforms and investment to support the decarbonisation of large industries (steel and chemicals), through electrification of production processes and switching to the use of renewable hydrogen or renewable hydrogen fuels. The total budget of the scheme is EUR 1 bn, with payments to be made in the period 2025-2031. The financing of this scheme is to be achieved through the sale of greenhouse gas emission allowances (CO2 allowances). The plan also includes an investment programme for the rehabilitation of main irrigation infrastructure (EUR 2,3 bn) and drainage infrastructure (EUR 34 mn). These measures will help addressing CSRs issued in 2022 and 2023 related to the need to reduce reliance on fossil fuels and accelerate the energy transition, by deploying renewable energy faster and improving grid capacity to allow new capacity to operate in the market. Aspects related to the fairness of the green and digital transition are not described in the plan. (41) Concerning the common priority of social and economic resilience, including the European Pillar of Social Rights, the plan includes a new State Support scheme for investments to support regional development, through large scale investment projects targeting high-end sectors and supporting the diversification of economic activities in the least favoured regions. The total allocated budget is EUR 450 mn. The plan also includes a State aid scheme for strategic investments, with grants, tax breaks and administrative simplification measures (shortening of deadlines for permits, direct award of land for the implementation of investments in the public or private domain owned by the state/local public authorities, provision of transport infrastructure and utilities necessary for the investments). The total budget of the scheme is EUR 1 bn, with payments to be made in the period 2025–2031. The sectors that will be able to benefit from this scheme are: the food industry, the chemical industry, the pharmaceutical industry, the metallurgical industry, the defence industry, the metal construction industry, construction of machinery and installations, manufacture of machinery and equipment, and electrical equipment. These measures will help address the CSR on the provision of liquidity support to the economy for businesses issued in 2020. (42) Concerning the common priority of energy security, the plan mentions Romania's participation in trans-national energy transport infrastructure initiatives aimed at increasing Europe's energy security, including the Southern Corridor, the BRUA Corridor (Bulgaria-Romania-Hungary-Austria) and the Trans-Balkan Corridor. (43) Concerning the common priority of defence capabilities, the plan refers to new initiatives to regulate the general legal framework for granting facilities to investments with a significant impact in the field of manufacturing. One of these facilities is a state aid scheme aiming at covering, inter alia, the defence industry. (44) The plan provides some information on the consistency and, where appropriate, complementarity, with the cohesion policy funds and Romania's RRP. cohesion policy funds and their benefits for Romania, and stresses the complementarity between national and European funds, especially regarding major infrastructure and rural development projects, and that the success of the use of European funds depends on the efficient management of European funds and funds allocated through Romania's consolidated general budget. (45) The plan provides an overview of the public investment needs of Romania related to the common priorities of the EU. Concerning a fair, green and digital transition, the plan refers to the aid scheme for the decarbonisation of industrial production processes by electrification of production processes and switching to the use of renewable hydrogen or renewable hydrogen fuels. In relation to social and economic resilience, including the European Pillar of Social Rights, the plan reports in particular the need to implement an investment programme for the rehabilitation of the main irrigation infrastructure, the state aid scheme to support investment projects in the manufacturing sector, and investments to ensure the regional development including large scale investment projects. On the build-up of defence capabilities, the plan reports the need to fully implementation the state aid scheme for strategic investments, with grants, tax breaks and other forms of support, which will support the defence sector, among others. ELI: http://data.europa.eu/eli/C/2025/647/oj 11/21 EN OJ C, 10.2.2025 Conclusion of the Commission's assessment (46) Overall, the Commission is of the view that Romania's plan fulfils the requirements of Regulation (EU) 2024/1263. OVERALL CONCLUSION OF THE COUNCIL (47) The Council welcomes the medium-term fiscal-structural plan of Romania and considers that its full implementation would be conducive to ensuring sound public finances and supporting public debt sustainability as well as sustainable and inclusive growth. (48) The Council takes note the Commission's assessment of the plan. However, the Council invites the Commission to present its assessment of future plans in a separate document from the Commission recommendations for Council recommendations. (49) The Council takes note of the Commission assessment of the net-expenditure path and the main macroeconomic assumptions in the plan, including in relation to the prior guidance by the Commission, as well as the implications of the plan's net expenditure path for government deficit and debt. The Council takes note of the Commission assessment that the macroeconomic and fiscal assumptions, while differing in some instances from the Commission's assumptions, including to cater for updated macroeconomic and fiscal data, are overall duly justified and underpinned by sound economic arguments. The Council takes note of the broad fiscal strategy of the plan and the risks to the outlook, which could affect the materialisation of the macroeconomic scenario and the underlying assumptions and the delivery of the plan's net expenditure path. The Council also notes that geopolitical risks may put pressure on defence expenditures. (50) The Council expects Romania to stand ready to adjust its fiscal strategy as needed to ensure delivery of its net expenditure path. The Council resolves to monitor closely economic and fiscal developments, including those underlying the scenario of the plan. (51) The Council considers that further discussions to find a common understanding on the annual surveillance implications of the cumulative net-expenditure growth rates is warranted in time for the next round of fiscal surveillance. (52) The Council endorses the set of reform and investment commitments presented by Romania in its medium-term plan underpinning the extension of the adjustment period and welcomes efforts to quantify the impact on growth and fiscal sustainability. The Council agrees with the Commission that the set of reform and investments commitments presented by Romania justify an extension of the adjustment period from 4 to 7 years. The Council takes note of the Commission's assessment pointing to the fulfilment, taken altogether, of the criteria in Article 14, also taking into account the transitional provision of Article 36 (1d), of Regulation (EU) 2024/1263 by the set of reforms and investments underpinning the extension. The Council takes note of the Commission's assessment indicating that the reform and investment commitments are expected to improve the growth potential and the resilience of the economy in a sustainable manner and support fiscal sustainability. The Council recommends Romania to fully implement the set of reforms and investments commitments to preserve the extension of the adjustment period. (53) The Council takes note of the Commission description of the reforms and investment needs and intentions, besides the assessment of the set of reforms and investment commitments underpinning an extension of the adjustment period, responding to the main challenges identified in the context of the European Semester, and stresses the importance of ensuring the delivery of such reforms and investments. The Council will, on the basis of reports submitted by the Commission, assess such reforms and investments and monitor their implementation within the framework of the European Semester. (54) The Council looks forward to the annual progress reports from Romania that shall contain, in particular, information about the progress in the implementation of the net expenditure path as set by the Council, and the implementation of broader reforms and investments in the context of the European Semester, as well as the implementation of the set of reforms and investments underpinning an extension of the adjustment period. (55) In accordance with Article 17 of Regulation (EU) 2024/1263, the net expenditure path as set in the plan should be recommended by the Council to Romania and the set of reforms and investments underpinning the extension of the adjustment period to 7 years should be endorsed. 12/21 ELI: http://data.europa.eu/eli/C/2025/647/oj OJ C, 10.2.2025 EN HEREBY RECOMMENDS that Romania: 1. Ensure that net expenditure growth does not exceed the maxima established in Annex I to this Recommendation. 2. Implement the set of reforms and investments that underpins the extension of the fiscal adjustment period to 7 years, as established in Annex II to this Recommendation, by the indicated deadlines. Done at Brussels, 21 January 2025. For the Council The President A. DOMAŃSKI ELI: http://data.europa.eu/eli/C/2025/647/oj 13/21 EN OJ C, 10.2.2025 ANNEX I Maximum nominal growth rates of net expenditure (annual and cumulative growth rates, in nominal terms) Romania Years 2025 2026 2027 2028 Growth rates (%) Annual 5,1 4,9 4,7 4,3 Cumulative (*) 20,2 26,0 31,9 37,6 (*) The cumulative growth rates are calculated by reference to the base year 2023. The cumulative growth rates are used in the annual monitoring of ex-post compliance in the control account. 14/21 ELI: http://data.europa.eu/eli/C/2025/647/oj ELI: http://data.europa.eu/eli/C/2025/647/oj OJ C, 10.2.2025 ANNEX II Set of reforms and investments that underpins an extension of the adjustment period to 7 years Romania Main objectives Description and timing of key steps (1) Monitoring indicator(s) Pension Reform The key objective of the reform is to ensure the sustainability of The normative act reforming the general pension Relevant RRP milestone C8.R6,0. the general pension system. The reform includes the following system entered into force on 1st September 2024. M214 satisfactorily fulfilled (Existing RRP measure: C8.R6,0. elements: new calculation formula for pensions, new pension M214) indexation rule and a mechanism to prevent ad-hoc increases in Implement the law in accordance pensions, reduced early retirement opportunities, incentives to with the Plan. extend working life, automatic increase in the standard retirement age in line with life expectancy, alignment of the legal retirement age for men and women at 65 years by 2035. Special Pension Reform (Existing The new legislative framework revises special pensions to better The normative act revising special pensions to align Relevant RRP milestone C8.R6,0. RRP measure: C8.R6,0.M215) align them with the contributory principle. No new categories of them with the contributory principle entered into force M215 satisfactorily fulfilled special pensions are created, and the existing categories are on 1st January 2024. streamlined. Special pensions are calculated based on the contributory principle, length of service, and adjustment of the percentage linked to earnings. The minimum contribution period is similar to that applied in the general pension system. No special pension is allowed to exceed the income earned during the contribution period. 15/21 EN 16/21 EN Main objectiv