Three quarters of Romanian localities are in technical bankruptcy, says EFOR

Under a quarter of Romanian localities (650) are able to cover their wage expenses from revenues and the regulated share of income tax, keeping most of the Romanian public administration hooked on discretionary allocations, according to a report on political clientelism published today by independent think tank Expert Forum (EFOR).

Close to a quarter of localities (685) have wage expenses that outstrip revenues two times.

“Our localities are designed to be in technical bankruptcy,” said Sorin Ionita, EFOR president. He urges more transparency and clear criteria for funds allotted from the government.

EFOR specialists reckon the rational fusion of localities and the enforcement of efficient administrative units with a strong financial basis would dent the influence of local political barons.

Ionita said a regional reorganization won’t solve on its own the structural issues of localities.

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The biggest allocations worth RON 5 billion (over EUR 1 billion) was made during the booming years of 2007-2008. These funds had various destinations, ranging from the building of roads and schools to the payment of bills.

The EFOR report also outlines the main flaws in the management of state-owned enterprises that make them unprofitable and assess the impact of discretionary allocations on the balance sheets.

The Romanian think tank has included the government allocations for the 2004-2011 period in an interactive map that can be consulted here.

Ovidiu Posirca