Romania targets 20 percent absorption rate for EU cohesion funds by end-2012

Romania is looking to improve its absorption rate for cohesion funds to at least 20 percent by the end of 2012, according to Ludovic Orban, head of the newly created Ministry of European Affairs, who emphasized the need to improve both the absorption and consumption rate of EU funds.

From 2007 to June 2011, Romania’s balance of EU Funds (how much it has received) reached EUR 4.9 billion, and has now exceeded EUR 5 billion. However, the absorption rate in the cohesion area stood at 3.7 percent, giving Romania the lowest absorption rate of EU funds in the EU 27.

On the bright side, EU officials applauded Romania’s progress in transfers to farmers, as part of the rural development program and direct payments scheme Romania is phasing in through to 2017.

Orban met last week with the EU Commissioner for Financial Programming and Budget, Janusz Lewandowski. The meeting took place within a conference organized in Bucharest on the EU Multiannual Financial Framework for 2014-2020. The debate centered on the future budget of the EU, with special attention paid to national budgets that are under serious pressure from austerity measures.

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Lewandowski stated that technical assistance was needed as well as improvements in the law that stipulates the public procurement mechanism in order to bolster the absorption of cohesion funds, designed to create growth and jobs. If Romania fails to meet this rate, further conditions may be imposed for the accession of these funds and their magnitude may also decrease.    

The next EU Budget, which is expected to be finalized by the end of next year, should see Romania receive an acceptable financial package. This outcome could be endangered by the current low absorption rate of approximately 5 percent and irregularities in the projects, as some payments from the EU have recently been frozen.     

In the joint press conference that closed the conference, Lewandowski said that the Romanian economy was in the process of full recovery, and is on track to improve its budgetary deficit.
Greece, the country expected to receive a EUR 60 billion bailout from the EU, should be given another chance, added Lewandowski. The EU has to financially assist Greece, giving the country additional time to make improvements to its public finances, although the progress made this year is disappointing, he said. Lewandowski warned that a default from the Greek economy would create a chain reaction, damaging all the economies throughout the EU.  ∫
 

Ovidiu Posirca