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April 11, 2021
ECONOMY FINANCE&BANKING

Romania’s EU funds absorption rate below Bulgaria’s or Czech Republic’s

Romania attracted around 17 billion euro by the end of last year, out of the 18.8 billion euros allocated in the 2007-2013 exercise, thus registering the lowest absorption rate, of 90.4 pct, by about 5 percentage points below the level recorded by other countries such as Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Poland, Slovakia, Slovenia and Hungary, according to a report released by the National Bank of Romania (BNR).

“Approximately two-thirds of these sums have been relatively evenly distributed (almost 4 billion euro in each case) to finance projects in three major areas: the development of transport infrastructure, the environmental protection (mainly works of expansion and modernization of water systems, development of integrated waste management systems) as well as the development of the educational infrastructure, of the on-going vocational training and micro-enterprise development. The remaining absorbed funds were directed towards the educational and vocational training of the labour force (including in the rural area), the development of the social inclusion, the streamlining of the economic activity (including through the financing of some R & D projects) respectively,” reads the document.

According to it, in the new financial exercise, inputs have so far been represented by down payments, and no information is available on the use of these amounts.

“The low absorption of the structural and cohesion funds implied an opportunity cost from the perspective of the convergence of the Romanian economy, as it was noticed that the regions with higher absorption rates during the period 2007-2014 usually have a faster pace of development. Programmes dedicated to the accumulation of physical capital and human development, the pillars of the economy’s growth potential, recorded the lowest absorption rates (87 pct at the end of 2016). The result can be attributed, in part, to the modest performance of the public sector, the investments funded with European funds representing 1 pct of the Gross Domestic product (GDP) from 2007 to 2014, as compared to an average of almost 2 pct in the other states of the 10 New Member States (NSM10) group (Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Poland, Slovakia, Slovenia and Hungary),” the quoted source mentions.

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