Romania could lose between EUR 3 billion and EUR 7 billion in funding from the EU Recovery and Resilience Facility (RRF) this year, depending on its ability to absorb the remaining resources, according to Paul Aparaschivei, executive director of the Concordia employers' confederation, one of the country's largest business associations, speaking to G4media.ro. Extreme weak absorption of RRF money would be associated with problematic budget execution, resulting in pressures on the sovereign rating.

Aparaschivei said Romania was unlikely to absorb the entire EUR 10 billion still available under the facility.

Under what he described as an “optimistic” scenario, Romania would lose 30% of the available funds, or around EUR 3 billion, while still managing to attract approximately EUR 7 billion by August.

A moderately negative scenario would involve the loss of half of the funds, equivalent to around EUR 5 billion. In that case, Romania would face difficulties but avoid more severe consequences, he added.

Under the worst-case scenario, however, the country would lose 70% of the available funding, or roughly EUR 7 billion, while also failing to improve tax collection, reduce budget deficits, and curb inefficient public spending.

“That scenario will bring us into the deeply negative area, in which Romania would even risk losing its rating recommended to investors, with catastrophic effects in the medium term for the entire economy and society,” Aparaschivei said.

Romania has faced repeated delays in implementing reforms and investments linked to the EU Recovery and Resilience Facility, raising concerns over its ability to absorb the remaining funds before the programme's deadlines.

Political and administrative uncertainty impacts the private sector as well.

Paul Aparaschivei argued that, due to the uncertainty generated by the political crisis, 7-8 companies out of 10 are on standby, waiting to see what they do with the funds earmarked for investments.

“We are once again seeing an extremely negative situation, an extremely negative perception, a pessimism at the societal level, which means, in the most practical sense, slowed consumption. We are waiting to see what we do with the money. Capital exists both at the level of companies and the business environment, as well as at the level of the population, but because this uncertainty makes you very cautious about what you do with your money, economic activity is not functioning,” he explained.

iulian@romania-insider.com

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