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June 22, 2021
BUSINESS

EU funds for Transport and Competitiveness sectors suspended?

PM Ponta and Ministry of European Affairs said they received no formal notification about a possible suspension. Until 30 September 2012, the absorption rate was approximately 10 pc, i.e. EUR 1.8 bln, from a total EUR 20 bln.

The European Commission (CE) will initiate the pre-suspension procedure for two more Operational Sectoral Programmes (POS) – Transport and Competitiveness – and the commissioner for Regional Development, Johannes Hahn will formally notify Bucharest about this issue, diplomatic sources told Gandul daily. The reason for this decision – upon which Romanian authorities were allegedly notified at the beginning of September – is represented by the problems found during an audit, mainly frauds, the sources explained. EC also initiated the pre-suspension procedure for the POSDRU program at the beginning of August. PM Victor Ponta said yesterday about this matter that he received no formal notification about a possible suspension of European funds for the two operational programmes and reaffirmed that the audits conducted during 2009-2011 revealed serious issues with these funds. Contacted by Nine O’Clock, the communication department of the Ministry of European Affairs (MAEur) said that it has received nothing officially yet.The EC is analysing all the Operational Sectoral Programmes (POS) implemented by Romania and envisages a pre-suspension decision, taking into consideration all variants: pre-suspending all the programmes, only some of them, or just a number of priority axes, HotNews.ro reports. The pre-suspension of payments forces Romanian authorities to enforce, within two months at most, the EC recommendations aimed at solving the problems found in the implementation of the programmes.The warning about the pre-suspension of payments was given to Romanian authorities by Angela Martinez-Sarasola, the chief of the Unit for Romania of DG REGIO (the European Commission’s Directorate General for Regional Policy), via the Permanent Representative Office of Romania at the European Union in Brussels.In the discussion with the members of the Representative Office, the EC official explained – according to a confidential document issued in 7 September 2012 – that she is still concerned with the very low rate of European funds absorption, especially as the gap between Romania and the other member states has considerably widened with this respect, of late. In this context, the EC official said that “the risk of the automatic disengagement of European funds has visibly increased,” especially as there is no hope that a solution to the existing issues is found soon.The pre-suspension procedure comes just one month before the European Council that will discuss the EU budget for 2014-2020 and places Romania in a difficult situation, as big contributors want European money to be allocated depending on how effectively it is spent by each member state.The payments for POS Transport and Competitiveness have been discontinued on July 1st, and the pre-suspension procedure is the next step. Once this mechanism is set in place, Bucharest authorities have two months to enforce the EC recommendations aimed at solving the problems, otherwise funding gets suspended.For 2007-2013, the EU allotted Romania structural and cohesion funds worth EUR 19.21 bln. Until 30 September 2012, the absorption rate was 9.7%, meaning EUR 1.8 bln. For POS Transport, during 2007-2013 the EU allotted Romania EUR 4.56 bln, of which EUR 295 M have been absorbed by September 30, accounting for 6.46%. For Competitiveness, only EUR 172 M was absorbed, out of a total EUR 2.55 bln (6.76%).

 

Resuming payments, almost impossible

The EC allegedly made this decision just days after its president Jose Manuel Barroso told PM Victor Ponta that the government’s plan of improving the absorption of European funds, sent to Brussels one month ago, is inefficient because it only provides short-term solutions, without being capable of solving the problems of the system on long term. Moreover, payments if resume if the problems related to frauds will be solved.In this context, according to diplomatic sources, the possibility of resuming payments is almost inexistent now and in the near future. Actually, the written warning sent by the Commission mentions that “in the two years since president Barroso wrote to the Romanian government about the need to take concrete measures and to substantially correct the problems, in view of increasing the absorption of funds, it has been noticed that the progress was slow.” Romania must continue to make considerable and extraordinary efforts to reach the key objective of strengthening the capacity of implementing programmes,” adds the document.

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