Romanian Deputy Prime Minister states that State-Owned Enterprises (SOEs) produce approximately 26 billion Euros in revenue, yet subsidies exceed accumulated profits

Romanian Deputy Prime Minister states that State-Owned Enterprises (SOEs) produce approximately 26 billion Euros in revenue, yet subsidies exceed accumulated profits

=====================================================================================

In Romania, state-owned enterprises (SOEs) continue to play a significant role in the country's economy, with a combined revenue of approximately €26 billion in 2021. However, recent developments indicate that the focus is shifting towards energy projects and the green transition, as the Romanian government prepares a state aid scheme worth around 300 million euros for geothermal energy production and thermal energy transport projects from 2025 to 2030.

This subsidy, sourced from the EU Modernization Fund and supported by revenues from CO2 emissions certificates, aims to cover 100% of the net additional costs of these renewable energy projects.

When it comes to profits, the Agency for Monitoring the Performance of Public Enterprises (AMEPIP) reported that Hidroelectrica alone contributed 46% of total SOE profits. However, no explicit recent profit data for SOEs were found in the available information. Fiscal reforms, including increased VAT rates and a 0.5% turnover tax on certain constructions, have been introduced, which may indirectly impact SOE financials through higher operating and investment costs.

The AMEPIP centralizes data for 1,326 public enterprises across Romania, but a concerning number of companies have failed to submit financial data. Roughly 300 enterprises did not submit their data, while another 250 reported zero revenue. These 550 companies are now facing penalties, with the agency having begun issuing fines on July 21.

The top-performing SOEs received significant subsidies, with the top-performing seven companies - CFR, Electrocentrale Craiova, Unifarm, CFR Marfă, Termoenergetica, Metrorex, and Complex Energetic Valea Jiului - generating RON 2 billion in losses despite receiving government subsidies.

Romania has significant non-reimbursable EU funds (€2.13 billion) available for the Just Transition Program (2021–2027), targeting decarbonizing six heavily polluting counties. However, disbursement and implementation have been limited and slow due to a lack of transparency and integrated planning, obstructing effective utilization of these subsidies for green projects.

Looking ahead, the European Commission has proposed to increase Romania’s EU budget allocation to €60.2 billion for the 2028–2034 period, which may enhance future subsidy and investment capacity in SOEs and related sectors.

In a recent statement, Deputy Prime Minister Dragoș Anastasiu acknowledged that SOEs continue to receive state subsidies larger than their aggregated profits. He emphasized the need for increased transparency and accountability in SOE operations to ensure the effective use of public funds.

In the coming days, the deputy prime minister announced that data tables collected by AMEPIP will be made publicly available, marking a significant step towards increased transparency and public scrutiny of SOE operations in Romania.

[1] Source [2] Source [3] Source [4] Source [5] Source

In the coming days, with the announcement of publicly available data tables collected by the Agency for Monitoring the Performance of Public Enterprises (AMEPIP), there will be an increased focus on the financial performance of state-owned enterprises (SOEs) in Romania, as it may reveal industry-related details such as costs, revenues, and profits. The European Commission's proposal to increase Romania’s EU budget allocation may provide additional resources for finance-related initiatives, potentially influencing the financial standing of SOEs and related sectors in the future.

Read also: