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Last week’s main news was the attempt of the Government to attain a political consensus on a multiannual transport infrastructure investment program. The topic is highly contentious, as Romania has been struggling with mixed results to use EU funds for the modernization of a largely outdated infrastructure project.
While plans for the upcoming years remain uncertain, the European Commission sent a powerful signal when it decided, on Tuesday, to allow Romania to retroactively use over 300 million Euro of cohesion funds for the Cernavodă – Constanța motorway, a segment completed in 2012. This illustrates the political will of the Juncker Cabinet to boost EU funds absorption in laggard member states such as Romania, as the 31 December cutoff date looms large.
The limits of this flexibility may be tested when talks on extending the grace period for using 2007-2013 funds come to a head. In this regard, the hope of the Agriculture Minister to obtain an extra six months for spending EU money may be overly optimistic without the assent of the more hawkish Council of the European Union.
EU Funds for IT&C were equally in the spotlight, as the European Commission announced it would suspend payments on Axis 3 of Sectoral Operational Programme Competitiveness (2007-2013). The decision, based on a recent audit by Brussels authorities, was triggered by suspicion of irregularities in public reimbursements to EU Beneficiaries that were rushed through in an effort to boost absorption figures.
On a more positive note, the implementation of the RO-NET Project was kicked off last week. The 85 million euro, EU co-financed project, aims to build over 4,800 kilometers of high speed internet in Romania’s rural areas in an effort to boost the country’s below EU average internet penetration rate. The project is driven by Telekom Romania in partnership with Huawei Technologies and Nextgen Communications.
The Government decided to contract a 1.4 billion RON loan from the national treasury with the aim of financing Management Authorities in charge of EU funds for 2007-2013. This cash injection is expected to improve the cash flow of programs financed by EU grants and lead to a better absorption of funds allocated to Romania by speeding up payments to beneficiaries.
In Brussels, the Commission adopted the draft Act creating a EUR 315 billion European Strategic Investment Fund. It seeks to unlock existing capital across the Union in an effort to increase competitiveness and provide a much needed stimulus to European economies. Once it enters into force, later this year, the Fund may provide an additional resource for countries like Romania, financing strategic projects in fields like energy, telco, infrastructure and IT.
