The European Union (EU) might increase four-fold the value of non-reimbursable funds granted to Romania, up to 670-680m euros, but Romania’s ability to use the money is quite poor, due to the small number of viable projects and the low possibility of the state budget to co-finance these projects.
The release of non-reimbursable funds is conditioned by the Government’s availability to co-finance up to 30% of one project’s value, from the state budget.
Fokion Fotiadis, head of the European Commission Delegation to Romania, told the members of the EU Accession Parliamentary Panel that the funds granted by the EU should be spent for projects developed in Romania. He added that it was very important for Romania to properly absorb these funds.
Premier Adrian Nastase shares Fotiadis’ opinion. He announced that, next week at the latest, the Government would endorse a decision to establish management units for Phare-financed projects.
Fokion Fotiadis says that Romania currently holds a low capacity to present programmes, as only 250m euros can be absorbed.
Unfortunately, this difficulty is triggered both by the Romanian entrepreneurs’ failure to draw projects meeting Phare-financing selection criteria and by the budget’s scarcity, which cannot supply these projects with the required funds.
Finance minister Mihai Tanasescu considers that the intention of EU officials to increase non-reimbursable funds for Romania by four times this year is “positive.”
“These funds meet some of the Government’s intentions, which will be accomplished through programmes such as SAPARD, RICOP and ISPA,” Mihai Tanasescu told Ziarul Financiar on Wednesday.
The Finance minister admitted that Romania had always had a poor ability to absorb EU funds, but he considered that, through the management implementing units, Romania this year was likely to attract higher funds than the level posted over the previous years.
Fokion Fotiadis briefly assessed the stage of Romania’s integration process and urged the members of the EU Accession Panel to act for Romania’s compliance with EU legislation.
As for Romania’s economic situation, Fokion Fotiadis said that the Executive should create a functional market economy, tighten financial discipline and cut the inflation rate.
He added that large state-owned companies should be directly privatised, without additional investments, as these were the main cause of the losses incurred by the state budget.