Romania doubles EU fund absorption rate in one year, minimum 15% target to be reached by end of 2012

Romania’s real absorption rate for EU structural and cohesion funds distributed through all seven existing operational programs reached 9.72 percent at the end of November 2012, almost double the level recorded in December last year, according to the latest status report published by the Ministry of European Affairs (MEA). During the first 11 months of 2012, structural and cohesion fund reimbursements from the European Commission amounting to EUR 800 million entered Romania’s budget. The situation of fund absorption in the past five years, expressed in actual figures, indicates that EUR 1.8 billion of EU money was channeled in Romania’s direction. The statement of expenses submitted to the EC totaled slightly more - EUR 2 billion - or 10.69 percent of the structural and cohesion funds allotted to Romania for the same reference period. Following a unblocking of reimbursements made under the Environment Operational Sector Program, which cleared the way for EUR 130 million to reach Romania, and based on reimbursement requests amounting to “several million euros” that are still to be submitted to Brussels, it is expected that the actual fund absorption rate should reach 15 percent by the end of 2012. "I expect that in this situation the absorption rate should reach a minimum of 15 percent by the end of this year, but we are dependent on the decisions concerning various operational programs", said the Romanian Minister of European Affairs Leonard Orban. Upon taking office in November 2011, Orban listed among his objectives an ambitious increase in the real structural and cohesion fund absorption rate, from 3.7 percent (EUR 716 million), as recorded at the time of his appointment, to 20 percent (EUR 3.8 billion) at the end of 2012. Beginning with July 2012, there was a sudden halt in the EU fund absorption process, after the European Commission found irregularities in four major programs covering regional development, environment and transportation issues, as well as economic competitiveness, which put an end to requests for fund in all four programs. According to the MEA report, the best absorption rate, measured by intermediary payments from the European Commission EC, namely 21.2 percent (EUR 786 million), was in the Regional Operational Program managed by the Ministry of Regional Development and Tourism. The Ministry of Administration and Internal Affairs with its Administrative Capacity Development Program comes in second, with an 18.62 percent rate (EUR 38.74 million), followed by an MEA initiative on Technical Assistance that reached 16.5 percent (EUR 28.08 million). The fourth and fifth positions on the best performers short list go to the Ministry of Labour and its human resource development program and to the Ministry of Economy that put a lot of effort into raising finance for its initiative on economic competitiveness. The weakest link of the fund absorption chain appears to be the Ministry of Environment with its 6.14 percent rate, which translates as EUR 277 million. Romania's EU absorption rate is one of the lowest in the EU and has been a main area of criticism from the EU authorities and many others ever since the country joined the Union.