Romania, Bulgaria have ‘missed opportunity’ to use EU funds
Delays by Romania and Bulgaria in using EU funds since their accession in 2007 have hampered the nations’ transition to democracy and a market economy, the French Senate says in a report.
The transition process in Romania as “far from being completed”, while in Bulgaria is “progressing slowly”, write French senators Simon Sutur, Michel Billout, Bernadette Bourzai, Jean-François Humbert and Catherine Morin Desailly, who recently visited Bulgaria on behalf of the Senate Foreign Affairs Committee.
The 50-page report points out to the “historic” EU enlargement, including the accession of Romania and Bulgaria, seen as two “genuinely” francophone countries.
However, the French senators highlight many deficiencies in the two countries and point out that EU funds are not being properly utilised to help their economies catch up with the rest of the Union.
In the 2007-2013 EU budget, €19.7 billion was allocated to Romania and €6.9 to Bulgaria. But Romania has been able to absorb, by January 2012, only 4% of these funds, while Bulgaria’s absorption rate is of 19% for the same period.
“These are the lowest absorption rates in the Union of 27 countries,” the French authors write.
A missed opportunity
The representatives of the French Senate note that the EU’s structural and cohesion funds allocated to Bulgaria were designed to boost the country’s GDP by 9 percentage points, if they were completely used by 2015. For Romania, these funds could amount to 3.8% of Romania’s GDP, they write.
Both Romania and Bulgaria experienced record growth until their accession in 2007, and decline thereafter. Romania suffered from recession in 2009 and 2010, while the country registered growth of 2.5% in 2011. This year’s forecast is 1.1%.
Bulgaria has experienced a growth of 6% in the period 2002 to 2007, followed by a decline to 1.7% in 2007-2010. In 2010, the growth rate was nearly zero, while it grew slight at 1.6% in 2011.
The French senators attribute the reasons for the countries’ inability to invest EU funds to “lack of experience”, “lack of administrative and judicial capacity”, persistent “fraudulent practices”, as well as restraints in terms of securing co-financing.
“The Commission recently agreed that the rate of co-financing should be changed from 15% to 5% for Romania and Bulgaria”, they write.
They also note that communist regimes in both countries had “sacrificed two of the three present generations” and has “anesthetised” civil society.
The French senators note that for the 2014-2020 budget, Romania and Bulgaria asked for a 25% increase of the cohesion funds allocated to them.
“The difficulty of absorption of EU funds of Bulgaria and Romania brings to mind that in the reconstruction of a state, everything goes upfront: it is because the rule of law is not achieved that the administrative and judiciary mechanisms remain unreliable, and that the funds are poorly absorbed. And while they are poorly absorbed, they don’t bring the expected results,” the senators write.
“From this mission the participants draw the conclusion that Bulgaria and Romania are still in transition phase and struggle to put in place in an irreversible way a state, based on the rule of law.”
Commission reports tough
The Senate Foreign Affairs Committee members sometimes find the Commission’s reports under the Cooperation and Verification Mechanism too tough, especially with regard to Romania. The last reports on Romania and Bulgaria, published on 18 July, are qualified as “extremely negative” for Romania and “a little more benevolent” for Bulgaria.
However, they support the Commission’s monitoring effort and state: “For the sake of Romania and Bulgaria, and for the sake of Europe, one has to remain vigilant, as in these countries, the battle is never won!”
The senators also note that several of their Romanian and Bulgarian interlocutors told them that without the Commission’s pressure, the two countries would be far worse.
When Romania and Bulgaria joined the EU on 1 January 2007, shortcomings remained regarding judicial reform and the fight against corruption. In the case of Bulgaria, problems also remained regarding the fight against organised crime.
A Cooperation and Verification Mechanism (CVM) was set up to assist both countries with judiciary matters after their EU accession. Moreover, the European Commission retained the right to use special safeguards.
These allow the EU to refuse to recognise court decisions or even freeze payments of EU funds.
On 18 July, the Commission published a scathing report on Romania, in the context of what the EU executive saw as a threat for the country’s constitutional order, under the new government of Victor Ponta. The next report on Romania is due in December. Regarding Bulgaria, the EU warned of persisting problems in combating organized crime. The next report on Bulgaria is due one year later.