Warning over Romania’s inability to absorb EU money


Romania is largely unable to take advantage of the billions of euro in EU financing available for the country's economic development, a think-tank has warned, and only 3.4% of the money is actually spent. EURACTIV Romania reports.

"The situation in Romania is alarming," warned Violeta Alexandru, head of the Institute for Public Policies (IPP), a think-tank, presenting a report on 12 July.

The report, entitled 'Structural funds – from development opportunity to budget of prey', highlights in detail the "extremely low" absorption rate of money allocated to Romania to help bridge its development gap with the rest of the European Union.

Significantly, the report slams the Romanian administration's "lack of transparency" in dealing with so-called "structural" funds.

Bucharest has absorbed only 3.4% of €20 billion in EU funding allocated for 2007-2013, said Ton Van Lierop, spokesperson for Regional Policy Commissioner Johannes Hahn.

"Romania is way behind Bulgaria," the IPP claims, refereeing to the neighbouring country which joined the EU together with Romania on 1 January 2007.

Romanian Prime Minister Emil Boc agreed, saying his country's rate of absorption of EU funds was "very low". The opposition asked the government to resign over what it described as a "disastrous performance".

NGOs and European experts have called on Romania to appoint a special minister in charge of coordination and absorption of EU funding. Bulgaria improved its performance after setting up such a ministry, back in 2008.

Romania's problems are "systemic", EU officials are quoted by Romanian website Hotnews as saying. They added that the country's problems stemmed from corruption, poor legislation, inefficient management and control, bureaucracy and conflicts of interest.

Speaking on national radio on 26 May, Romanian President Traian Basescu said that some projects involving EU funds had been audited, and that irregularities were found, exposing the risk that some of the money could be returned to Brussels.

Basescu added that such problems particularly appeared when EU funds were transferred from the central government to local authorities.

"As I speak from the national radio, I call on the local administrations: be careful with the funds of the Regional Development Ministry, of the Ministry of Agriculture's money, of the Ministry of Labour's. Do respect the procedures because the signals we've got so far are serious enough," the head of state warned.

MEP Jorgo Chatzimarkakis (ALDE; Germany) recently told EURACTIV in an exclusive interview that Greece, Romania and Bulgaria should agree to allow foreign experts to manage EU funding.

"All [these countries] have the problem of being very proud, saying 'this cuts our sovereignty', although this is just not the case, of course," Chatzimarkakis said.

The regional policy (also called 'cohesion policy') of the European Union has the overall goal of promoting economic prosperity and social cohesion throughout the entire territory of the Union, which means the 27 member states and their 271 regions.

Within the current financial framework (2007-2013), spending on regional policy amounts to an average of almost €50 billion per year, which is more than one third (35.7%) of the total EU budget.

Regional policy spending is channelled through three funds – often called 'Structural Funds'. These are the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund.

The three main objectives of the EU's cohesion policy are: Convergence, Regional Competitiveness and Employment, and European Territorial Cooperation [more].

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