Romania receives a portion of disbursement from the third tranche of the Resilience Facility
Unleashing the Resilience: Romania's Journey Through the EU's Third Recovery Fund
Romania is anticipated to gather a whopping EUR 1.3 billion out of an envisioned EUR 2 billion (excluding pre-financing) from the European Commission's third Resilience Facility. The Ministry of Investments and European projects (MIPE) shared this news, with a six-month deadline for Romania to make good on all targets to pocket the remaining funds, as announced.
Romanian efforts toward microenterprise reform have shown promise, but one must acknowledge the country's ongoing struggles with excessive spending on "special pensions" and the need for enhanced corporate governance in state-owned enterprises. Unfortunately, despite some steps in this direction, these areas continue to be problematic for the nation.
The European Commission has taken notice of the unmet targets, and as such, activated the "suspension of payments" procedure for Romania, as prescribed in the Resilience Facility Regulation. Rome now has one month to submit an official response to the Commission's letter and six months to implement all necessary measures to meet the milestones and targets outlined in the payment request, thereby unfreezing the payment.
In the latest communication from the Commission, it is clarified that the 215th milestone, concerning the entry of legislation to reduce expenditure on special pensions, has not yet been met at this juncture.
Romania's remaining tasks also encompass improving the corporate governance of its state-owned energy ventures, implementing corporate governance policies for state-owned enterprises, and appointing management within the National Agency for Monitoring and Evaluation of Public Enterprises - AMEPIP.
Romania currently wields a sizable EUR 28 billion allocation under its national plan for the Resilience Facility (PNRR), secured through eight payment requests tied to comprehensive reforms and investments. With the programme set to expire, there is room for the government to submit two to three additional requests beyond the three that have already been dispatched.
(Article originally published on Romania Insider; photos sourced from Ruletkka/Dreamstime.com)
In the Finer Details:The search results reveal several challenges and requirements facing Romania as it works to optimize the Recovery and Resilience Facility (RRF). These include:
- Fiscal Pressures and Political Uncertainty: The Romanian government plans to lower its fiscal deficit to 7% of GDP by 2025, primarily through cuts in current expenditure, such as freezing public sector wages.
- Absorption Rate of EU Funds: Romania's absorption rate of the RRF is presently around 33%, which trails behind many of its contemporaries. A slow absorption rate poses risks that Romania could forfeit a substantial amount of its RRF allocation if it fails to accelerate reforms and meet milestones.
- Special Pensions and Corporate Governance: To fully benefit from the RRF, tackling issues like special pensions and improving corporate governance in state-owned enterprises are vital. However, the specific measures needed by the European Commission are not detailed in the available search results. Generally, the EU calls for reforms that foster transparency, accountability, and efficiency in state-owned enterprises, and the rationalization of special pensions to ensure fiscal sustainability.
- Next Generation EU Programme Deadline: The Next Generation EU programme comes to a close in August 2026, which adds urgency to Romania's need to meet its targets to avoid losing access to a significant portion of its RRF funds.
In addressing the challenges presented by the Recovery and Resilience Facility (RRF), Romania must focus on three primary areas: finance, industry, and business. The government's plan to lower the fiscal deficit to 7% of GDP includes business measures like freezing public sector wages, which will impact the nation's finance sector.
Moreover, enhancing corporate governance in state-owned enterprises (business) and addressing the excessive spending on special pensions (finance) are essential for Romania to access the full benefits of the RRF. The need for transparency, accountability, and efficiency in state-owned enterprises and the rationalization of special pensions are advised by the European Commission as part of their call for reforms.
