Romania gains the top placement in the 2008 Fiscal Flexibility Index introduced by Standard & Poor's Ratings Services, on substantial potential for growth in revenues without increases in tax rates, the agency said in a study of 30 investment-grade European sovereigns.

However, Romania's top placement in the Fiscal Flexibility Index is, something of a crown of thorns, as it reflects poor tax administration and a slippery tax base, Reporter.gr said citing Standard & Poor's credit analyst Eileen Zhang.

The role of the index featured in the study is to facilitate cross-country comparisons of governments' ability to adjust to adverse economic conditions by modifying tax and expenditure policies in a way that safeguards smooth debt-service payments, S&P said.

Small European sovereigns dominate the ranking of governments most able to adjust to adverse economic trends and react swiftly and effectively in the wake of economic shocks, according to the S&P report.

"At the opposite end of the flexibility scale, continental European sovereigns are among the most constrained. Of the 30 countries, Belgium is placed lowest, preceded by Austria, Germany, Sweden, Denmark, and Italy, with Norway, Finland, and France not faring much better."

Bulgaria enjoys the 8th place, while Greece is 16th and Slovenia 19th.