Romania receives partial payout from third installment of Resilience Facility tranche
Romania Needs a Speedy RRF Boost 🇷🇴
The Romanian government is in a pickle, needing to pull its socks up to secure the full payout of EUR 1.3 billion from the European Commission's third Resilience Facility. The ministry involved, MIPE, announced a six-month window for Romania to tackle those targets, or miss out on the rest of the cash.
After completing the microenterprise reform, Romania still has some ground to cover. For instance, the country's excessive spending on "special pensions" and lackluster corporate governance in state-owned enterprises remain unaddressed issues.
The European Commission (EC) has declared that Romania's milestone 215 ("legislative framework to reduce expenditure on special pensions") is yet to be met, and there are other tasks to be completed. Apart from improving corporate governance of state-owned energy firms, Romania must operationalize governance policies and appoint management at the National Agency for Monitoring and Evaluation of Public Enterprises - AMEPIP.
Brace yourselves, Romania, as you've got EUR 28 billion waiting under the national plan for the Resilience Facility (PNRR). The funds are released through eight payment requests linked to significant reforms and investments. With the program set to expire, the government has time to submit two to three more requests on top of the three already sent.
But, there's a catch. The current absorption rate for Recovery and Resilience Facility (RRF) funds is only around 33%. With just 14% of milestones and targets achieved, Romania faces a major delay in making progress[2][3][4].
Accelerating reforms and meeting more milestones are essential, but Romania grapples with domestic political divisions and the lingering presidential election[2][4]. The EC advises focusing on improving the administrative and technical aspects of the plan to close the gap in progress[5].
Other troubles brewing include low absorption rates, domestic political uncertainty, and fiscal pressures impacting the government's ability to implement reforms. Lack of performance-based evaluation could potentially undermine the effectiveness of investments made[2][4][5].
So, get a move on, Romania! You got this, but you'll need to tackle the issues head-on - no more dilly-dallying! 💪
*(This article was brought to you by Romania Insider. A speedy recovery awaits you! 🏁)
Note: Image source - Ruletkka/Dreamstime.com**
[1] The European Commission has flagged the need for Romania to address excessive spending on special pensions and make improvements in corporate governance. Source: Romania Insider[2] The National Recovery and Resilience Plan (NRRP) lays out specific reforms and targets that Romania must meet to unlock RRF payments. Source: European Commission[3] The RRF fund absorption rate in Romania is around 33%, which is a significant concern. Source: European Court of Auditors[4] Domestic political uncertainty and divisions are major impediments to achieving EU milestones and targets. Source: European Commission[5] The RRF measures technical implementation rather than real results or social and economic impact, meaning Romania should focus on improving administrative and technical aspects of its plan. Source: European Court of Auditors
- To expedite the release of the EUR 1.3 billion from the European Commission's Resilience Facility, Romania must address the issue of excessive spending on special pensions, as advised by the European Commission.
- In addition to reforming the microenterprise sector,Romania needs to improve the corporate governance in state-owned enterprises and operationalize governance policies to meet the requirements of the Resilience Facility.
- The National Agency for Monitoring and Evaluation of Public Enterprises - AMEPIP in Romania requires management appointments to complete a portion of the tasks set by the European Commission for the Resilience Facility.
- To raise the absorption rate of the Recovery and Resilience Facility (RRF) funds, which is currently at around 33%, Romania urgently needs to tackle domestic political divisions and prioritize improving the administrative and technical aspects of its RRF plan.
