The situation would not be as disheartening as it is if the money was recovered from the reimbursements of the European Commission for the European projects within a reasonable timeframe. Yet the data show the reimbursement pace is extremely slow, only EUR194 million in the first three months of the year instead of the budgeted EUR875 million. The government pledged to draw a total of EUR3.5 billion for structural programs from the European Union in 2012.
The payments to the local beneficiaries of European funds, which are to be reimbursed from Brussels, amounted to RON2.5 billion, according to the Ministry for European Affairs, that is twice more money than Romania “recovered” from Brussels. Part of this money came in form of EU pre-financing, but most is money from the state budget.
At the end of March, the amount of funding granted to EU fund beneficiaries stood at RON16 billion, but reimbursements from the EU stood at merely EUR1.26 billion. Again the state budget, fed by taxes, generously compensated for the inability to attract funds.
The government had promised to attract EUR3.5 billion in structural and cohesion funds. This would have meant a monthly average of EUR291 million and a quarterly average of EUR875 million. Yet in the first quarter, only EUR194 million were absorbed, that is 22% of the quarterly average targeted.
The Boc Cabinet in 2011 said it would get EUR2.5 billion from the EU but in the end got a mere EUR1 billion. This means the amount attracted by the end of March this year, five years after the EU accession, stood at EUR1.2 billion or 6.5% of the EUR19.6 billion allocated for Romania in structural and cohesion funds for 2007-2013.
Last fall, the government set up a new ministry, the Ministry of European Affairs, precisely to have an institution supervise and speed up fund absorption. The ministry started to revise the legislation, is organizing seminars and says it will clarify and simplify procedures to attract funds, but has hardly seen any results so far.
In January, the Treasury did not get any money from the EU, but the beneficiaries got RON369 million, most of which from the state budget (normally, the projects are 15% co-financed by the budget or the management authorities). The representatives of the management authorities said the large amounts of money usually come towards the end of the year.
Yet the European Affairs Minister Leonard Orban said that if reimbursement applications are not filed in the first half of the year, the EU budget may run out of money in the second half and Romania may get its due only next year. Who is right about this? Who pays? The state budget.
The budget will pay either directly, or by lending RON1.4 billion in the first quarter and RON2.5 billion in the second to the management authorities. If it keeps going like this, the budget will have lent EUR2 billion to compensate for the lack of EU funds by the end of the year. Meanwhile, the Finance Ministry is borrowing money and paying hefty interests for it not only to cover the budget deficit but also the incapability of the authorities to attract the EU funds, which are granted for free.
(English version by Loredana Fratila-Cristescu)