Andrew McDowell, the vice president of the European Investment Bank (EIB), said that obtaining financing for projects is not an issue for Romania, as there are plenty of sources, but that the issue is the insufficient effort put into projects, which thus can’t attract more European money, both when it comes to public as well as private investments.
In this regard, Romania ranks among the last places in the European Union, according to the EIB’s study.
From 2007 to 2015, Romania received EUR 35.5 billion in EU funds, of which it has only spent EUR 5.8 billion – ranking 18th in Europe in terms of absorption percentage.
Central bank governor Mugur Isarescu said also talked about the need for investments: “Economic growth is strongly linked to economic cycles, but its sustainability depends on strategic, long-term investments much more than it does on a short-term consumption boost.”
McDowell pointed out the need for infrastructure investments: “We all know that Romania needs better economic and social infrastructure. Especially for transport, but also for the environment, healthcare and education. Financing is not the main obstacle – preparing projects is.”
Considering that the government insists on doing major projects through public-private partnerships instead of using European money, McDowell said, “It’s important to start with small projects which are easy to complete, where success is guaranteed. But the worst thing that could happen is to start a project that is too large for the PPP, because it will drag Romania down.”
The EIB study showed that 73 percent of Romanian companies are relying on internal financing, and 70 percent of business owners say they can’t make investment plans due to the unpredictability and the lack of workforce.
Investments made by companies also have the lowest rates in the EU: only 68 percent of companies have invested in the past year, while the EU average is 87 percent.