The unfreeze of the funds offers the prospects of a good start of the year in terms of attracting EU funds, currently at a very low rate of 4% of the overall non-reimbursable EUR19.7 billion in structural funds – considering that, as loans have become more expensive, the non-reimbursable money from the European Union could be one of the safe and cheap methods of financing investments and businesses.
January could also see a measure already agreed at EU level and in the European Parliament take effect – that the level of co-funding of EU projects would temporarily be reduced to 5% for Romania and other EU member states, so projects approved by the European Commission would be 95% covered by the Commission.
In addition, starting January 1, 2012, the VAT for projects financed with EU money will be deductible, a measure already adopted by the Government.
The authorities talk about the absorption of EUR6 billion in European funds next year – EUR4 billion in structural funds and EUR2 billion in funds for agriculture.
The European Commission decided after six-month freeze, to restart financing POR programs, suspended in the summer, when a Brussels auditing mission found some irregularities.
The problems were found in the organization of public tenders (which are organized by county councils, although POR is managed by the Development Ministry).
The Commission asked for the reevaluation of the legislation on public tenders, and the Government stopped sending bills to Brussels for all EU-funded projects, which involve public tender procedures.
The stated reasoning of this measure was to avoid the situation where the Commission itself would find irregularities and withdraw the funds, with the standard procedure being that if irregularities are found by the domestic authorities, the funds are not cut, but redirected.
EUR300 million worth of bills could be paid back shortly, considering that they had up to now been paid by the Government through a special fund. A further EUR1.5 billion worth of bills that have already been checked or are in the last stage of the process could be paid back soon.
(English version by Daniela Stoican)