|  02.07.2014

Major progress in EU Funds absorption, although Romania is still below average by comparison to other Central and Eastern European countries

KPMG has published its latest report on European funds, EU Funds in Central and Eastern Europe – Progress Report 2007-2013, a study aimed at providing an overview of the progress of the National Strategic Reference Frameworks near the end of the programming period 2007-2013

Since countries in Central and Eastern Europe joined the European Union in 2004, 2007 and 2013, it has become apparent that effective utilisation of EU support can enhance their economic performance. The region is now at the end of the programming period and this allows for more strategic conclusions based on an analysis of the EU Structural and Cohesion Funds (SCF) absorption rates.


After seven years of the current programming period, the ten CEE countries under assessment[1]  contracted a total of 98% of the budget allocated. As at the end of 2013, Bulgaria’s and Hungary’s National Strategic Reference Framework programmes showed the highest contracting ratio, ranging between 112% and 106%, which is also outstanding on a time-proportional basis. The greatest progress was observed in Hungary. At the end of 2013, the countries with the lowest contracting rates were Slovakia and Romania. The payment ratio showed a slightly different pattern, with the Baltic countries taking the lead.


An important factor in indicating the real level of EU funds management is the difference between contracted grants and paid grants. The smaller difference between these two factors shows more efficient EU funds management terms of real distribution. Estonia is the leader in EU funds distribution with only a 19% difference between contracted grants and paid grants. Lithuania also achieved good results (25%). The biggest differences between contracted grants and paid grants are observed in Bulgaria (58%) and Romania (57%).


In 2013, Romania had an absorption level of EU funds of about 34%, with payments in the same year of EUR 2.88 billion from the European Commission. In comparison, during the entire 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. There are signs 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.


For the new 2014 - 2020 programming period, the amount of EU funds allocated varies by country, with the largest budget allocated to Poland, which has the highest population of the CEE countries. However, the EU funds per capita ratio is the highest in Slovenia. Poland and the Czech Republic account for almost 50% of the allocated EU funds. Together with Hungary and Romania, their total amount constitutes almost 2/3 of the total EU funds allocated for the CEE region.


Șerban Toader, Senior Partner, KPMG Romania: “In the current global economic context, any positive sign represents one step forward in building confidence in the national economy. This is also true for the performances registered in the absorption of European funds, which, however, means that authorities should adopt a prudent and vigilant approach, focused on strengthening the actions that have proven efficient and on correcting those that have generated various operational concerns.”


Daniela Nemoianu, Executive Partner, KPMG in Romania: “The report issued by KPMG in 2014 outlines the performance registered by Central and East European countries in the take-up of EU funds. While it is highly encouraging to see an increase in the EU funds absorption rate nationwide, with good prospects for the forthcoming period, we still need to assess our results against the progress registered by the neighbouring countries and scrutinize Romania’s performances in a global competitive context.


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.


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.  However, the efforts and specific measures that need to be implemented in the strategic intervention areas in the forthcoming period should not be underestimated. One example is the high-priority national/regional infrastructure projects that require an integrated planning and implementation approach.”


Florin Bănăţeanu, Director of EU Funds and Public Sector Department within KPMG Romania, adds: “Romania has obviously made progress in terms of EU funds absorption, but the positive results need to be further sustained through consistent and realistic policies and a better allocation of the funds earmarked for technical assistance.”

[1]   In KPMG terminology Central and Eastern Europe refers only to some European countries, not necessarily historically considered as a part of the CEE region. However in this report, we consider as CEE countries those which are both in KPMG’s CEE region and EU Member States, i.e.:

Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.


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