Romanian PM seeks to speed up use of EU funds

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Romanian Prime Minister Mihai R?zvan Ungureanu is due to visit Brussels today (15 March) to lobby for help in spending €6 billion in EU structural funds to boost the country's flagging economy. EURACTIV Romania contributed to this article.

Ungureanu is scheduled to hold talks with Commission President José Manuel Barroso and European Council President Herman Van Rompuy on ways to boost growth through a better absorption of EU funds.

Ungureanu took over as prime minister last month following more than 20 days of protests over austerity measures and the economic downturn.

European Commission spokesperson MarkGray said the main focus of the talks would be the economy, an EU-International Monetary Fund assistance programme and the EU structural funds.

Gray added that a discussion on EU funds will lead to another issue, namely the progress of Romania under the Cooperation and Verification mechanism (CVM), put in place to accompany the country's EU accession in 2007 (see background).

The previous Romanian government had said the country made unprecedented efforts to reform its law enforcement system, suggesting that Bucharest wanted to see the EU monitoring mechanism put in place five years ago removed by the summer.

The meeting comes in the backdrop of EU leaders recently offering Greece more help to spend unused EU money. Even though Romania is not under the same aid programme and does not have the same debt problems as Greece, it does have the lowest absorption rate of structural and cohesion funds in the European Union – less than 10%.

Funds left unspent at the end of 2013 are to be returned net donor countries.

“There is still a lot of scope for EU structural funds to be used to boost the absorption rate of Romania,” Gray said. 

Speeding the use of €6 billion in EU funds would jumpstart the recovery of the Romanian economy, said the technocrat premier, who is proposing growth measures that include a possible wage increase for civil servants. 

Ungureanu, who until recently headed Romania's foreign intelligence service, said the country needed €2.5 billion in agricultural subsidies and €3.5 billion in cohesion and structural funds.

“We have to give the economy a boost, because now it is stagnating and I think that eight months of mandate is enough to achieve this,” Ungureanu said.

In the coming weeks, Ungureanu might start laying off those civil servants, heads of operating agencies and even ministers who are responsible for the applying for EU funds if Romania doe not remove the obstacles blocking it from receiving this money, said Dan Suciu, government spokesperson.

The main problems, said Suciu, are the slow pace at which funds are processed and “management failures”.

“We have clarified a number of solutions," said Suciu. “The prime minister said he is prioritising the process of the absorption of EU funds. He is no longer willing to tolerate any form of delay in those processes.”

The premier has asked all the outstanding assessments of EU projects to be resolved by the end of March, Suciu said.

Romania is already receiving some external help to spend EU money. The Romanian government signed an agreement with the Commission’s Regional Policy Directorate in late January, said the Commission’s spokesperson for regional policy, Ton Van Lierop.

The deal sees Romania using several experts from the European Investment Bank, the European Bank for Reconstruction and Development, the World Bank and the International Monetary Fund.

This unusual measure, said Van Lierop, would entail expertise in reducing red tape, looking at how to best handle projects, speeding up proceedings and using experience from other member states in applying for EU funds. 

Octavian Serban, who has coordinated the administration of EU structural funds in Romania and was a consultant for the ministry of economy, says the absorption of EU funds is a structural problem, “a problem of the entire system”. “

There are many causes, corruption, poor administrative capacity, misunderstanding of how European regulations work, lack of motivation, delayed implementation of the powers of the guarantee fund, lack of co-finance, the divergent interests of banks… We need political courage, institutional and social structural problem to attack the problem.”

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.

However, starting 1 January 2010 Brussels no longer had the power to trigger the clause.

On 13 September 2010 EU countries decided to extend monitoring of Romania and Bulgaria for another year. On 20 July 2011 Romania and Bulgaria were again given one more year before the Commission tabling "appropriate proposals"

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