ROMANIA'S PROJECTED USE OF EU STRUCTURAL FUNDS

Romania’s EU membership makes it eligible for billions of euro in EU grant funding. Structural Funds are available to support investment in physical infrastructure and many other types of projects, and require a co-financing component from the recipient, in addition to the national government. The EU has allocated approximately 27.5 billion euro to Romania for projects in areas ranging from transport and rural development, to energy and environment. However, Romania has a dismal record of availing itself of these funds. The rate at which it has been able to apply for, receive and contract for the use of these funds – or the “absorption rate” – is the lowest of all the 10 newest EU members, five years after Romania attained membership. Access to these funds expires in 2015.

The problem is a combination of money and administrative capacity. Romanian authorities must improve their ability to design worthwhile projects meeting stringent EU guidelines as well as provide required co-financing. On some infrastructure projects, for example, expenses ineligible for EU funds (such as land acquisition) may equal up to half of the total project cost. The continuing challenge has been a lack of adequate administrative capacity and project management skills to plan, budget, obligate and spend these funds in an efficient, transparent and effective manner. Internal project review and approval procedures implemented by Romanian authorities are also multi-layered and cumbersome.

During the 2014-2020 funding window the Romanian Government is counting on being  allocated about EUR 43 billion in European cash.  Romania’s development needs and priorities put forward for funding during 2014-2020 are the following:

• Competitiveness, including strengthening research , technological development and innovation as well as improving access, use and quality of information and communication technologies and increasing the competitiveness of small and medium enterprises , the agricultural sector and the fisheries and aquaculture.
• People and society, including promoting employment and supporting labor force mobility, encouraging social inclusion and combating poverty as well as investing in education, skills and lifelong learning.
• Infrastructure, for  improving access, use and quality of information and communication technologies as well as promoting sustainable transport and removing bottlenecks in the important network infrastructure.
• Resources, including supporting the transition to a low carbon – dioxide emission economy in all sectors, promoting climate change adaptation, risk prevention and management and protecting the environment and promoting resource efficiency.
• Administration and Governance, in areas such as increasing institutional capacity and efficient public administration as well as improving access, use and quality of information and communication technologies.

There is no indication yet of the financial allocation of available funds to finance identified priorities because financial matters remain to be finalized at the European level.