BCR to channel Romania’s inflow of EU funds post PHARE and ISPA

Romanian lender Banca Comerciala Romană (BCR) has been named as the financial institution through which the final EU pre-accession financial contributions are channeled into the Romanian budget, as of the beginning of November 2012, according to a BCR press release. The incoming funds represent the money paid by the European Commission to the Romanian state following the completion of the PHARE and ISPA pre-accession programs. The EU pre-accession contribution represents the sum allotted to Romania as non-refundable financial assistance under the provisions of the Memoranda of Understanding and of the Memoranda of Financing/Financing Agreements concluded between the European Commission and the Romanian Government. PHARE (Poland Hungary Aid for Reconstruction of the Economy) is one of the three pre-accession instruments financed by the EU to assist candidate states in Central and Eastern-European countries in the process of accession to the EU. PHARE funding was intended to support a strengthening of new member states’ administration for an efficient operation within the EU context, an alignment of national legislation to EU laws and the promotion of social and economic cohesion. In the human resources domain only, Romania has managed a EUR 4 billion budget through its PHARE Payments and Contracts office in the past seven years, according to official statements made in February 2012. ISPA is a financial instrument designed to “assist the candidate countries in the preparation for accession” by providing funding for infrastructure projects pertaining to two priority fields for the EU - environment and transport - according to the EC web site. Between 2000-2006, EUR 1 billion a year was allotted to this program which, during its first four years of existence, supported 300 large-scale infrastructure investments in 10 candidate countries of Central and Eastern Europe. Following the EU enlargement in 2004, Romania and Bulgaria were the remaining ISPA beneficiary countries. BCR, member of the Erste Group, is the main Romanian financial group, ranking first among Romanian banks with total assets of over EUR 16 billion and the largest client portfolio on the savings and loans segments. Erste Group is the major provider of financial services in Central and Eastern Europe, with EUR 217 billion in total assets end of September 2012 and an operating profit of EUR 2.6 billion for a cost/income ratio of 51.9 percent. Ioana Jelea, ioana.jelea@romania-insider.com (photo source: BCR)