Romania managed to get only EUR 5.1 billion of the EUR 19.2 billion in EU funds it was assigned for the period 2007-2013, and has the lowest absorption rate of all the EU member states in the Central and Eastern European (CEE) region, according to a research published by KPMG.

The EUR 5.1 billion amount represents payments certified by the European Commission, which is money that Romania actually received from the European Union. Romania lags much behind other neighboring states. For example, Bulgaria has a 49 percent EU certified payment ratio, while Poland managed to get 63 percent of the EU funds available. The leader is Estonia, with a 71 percent real absorption ratio.

The good news is that Romania managed to make some progress in EU funds absorption last year, when it got EUR 2.88 billion in reimbursements from the European Commission, which is 34 percent of the total funds available for the year. In comparison, during the 2007-2012 period, only EUR 2.2 billion were drawn.

“While 2013 saw a significant improvement in the absorption rate of EU funds, Romania is still behind other EU Member States in the overall absorption rate picture. Nevertheless, it has taken positive steps to recover the gap, with much better results towards the end of the programming period than at the beginning,” according to KPMG.

The total payment ratio for Romania, which reflects total payments made for EU funded projects, was 37 percent for the period 2007-2013. This is a total of EUR 7.03 billion paid grants, out of which EUR 5.09 billion were reimbursed by the CE and the difference needs to be certified by the EU in order for the money to be repaid to Romania.

The overall payment ratio for Romania is also the lowest among CEE member states. In Bulgaria the payment rate was 54 percent, in Hungary – 62 percent and in Poland – 64 percent. Baltic countries lead the pack with payment ratios of more than 70 percent.

The contracting ratio for Romania, which reflects the total value of contracts for EU funded projects that were signed by managing authorities, was 94 percent. This means that total contracts signed amount to EUR 18 billion. However, Romania has one of the largest gaps between contracts signed and payments made, of 57 percent. This reflects an inefficient EU funds management for the analyzed period.

“We can still see a number of recurrent negative aspects that have impacted the results. These include delays in the evaluation of financing/disbursement applications, lack of technical/institutional skills of beneficiaries, as well as cumbersome public procurement procedures in terms of speed, quality and resources involved,” said Daniela Nemoianu, executive partner in KPMG Romania.

However, KPMG estimates that 2014 will be better than 2013, as a result of the recent developments shown by the Sectoral Operational Program -Transport and Sectoral Operational Program –Increasing Economic Competitiveness,” according to KPMG.

“We are now facing a new spending plan covering the 2014 – 2020 programming period, and the positive results of 2013 suggest that the actors involved in the management of structural and cohesion funds benefit from a real operational and strategic potential,” Nemoianu added.

Romania was assigned a total budget of EUR 21.4 billion for the 2014-2020 period, which is 11.5 percent higher than for the 2007-2013 period. For comparison, the Budget allotted to Bulgaria was increased 2.3 times, to EUR 15.7 billion.

Read the full report here.

Andrei Chirileasa, andrei@romaia-insider.com