Delay in EU Funds Absorption: A Troubling Predicament for Romania
Romania faces potential forfeiture of more than 40% of Resilience Facility funds
Romania's difficulties in absorbing EUR 11.9 billion of loans and grants from the European Union's Recovery and Resilience Facility (RRF) budget are primarily due to substantial project delays and political challenges.
The Core Issues
1. Dragging Project ImplementationAlarmingly, the Romanian authorities have identified projects worth around EUR 8 billion that are lagging, with progress rates lower than 50%. Moreover, the European Commission has pinpointed an additional EUR 3.9 billion in delayed projects. These delays are directly linked to the risk of Romania forfeiting over 40% of the allocated RRF funds, translating to a loss of EUR 11.9 billion out of the EUR 28 billion total budget for the country under this facility[2].
2. Rebooting and Replacing ProjectsAs a response to these delays, Romania is contemplating renegotiating its national resilience plan (PNRR) to replace the slowed RRF-funded projects with others supported by the national budget (under the Anghel Saligny scheme) while still adhering to EU funding restrictions. This reconfiguration aims to guarantee the disbursement of the grant component, amounting to EUR 13.1 billion, but necessitates bureaucratic maneuvering, adding to the slow absorption rate[2].
3. Tumultuous Political SceneRomania's unstable political backdrop, characterized by tenuous coalition governments and upcoming elections, fosters an environment that impedes the swift implementation of reforms and projects critical to efficiently absorbing EU funds. A shaky coalition with internal disagreements slow-pedals fiscal reforms and austerity measures crucial for unlocking more EU recovery funds. Political hazards, if unresolved, may further delay implementation and absorption efforts[4].
4. Timelines and Regulatory BarriersThe RRF initially had an August 2026 deadline to finish projects and absorb funds. Many projects are unlikely to meet this timeline without extensions. The European Parliament has approved Romania's initiative to extend the facility in the face of implementation delays, and the European Commission is considering proposing amendments to extend the deadline. Nonetheless, these procedural steps entail negotiations and agreement from all Member States, creating additional complexity and delay[1][5].
Conclusion
Romania's delay in absorbing EUR 11.9 billion under the RRF is a result of cumulative issues such as sizeable project delays, the need for renegotiation, political instability, and strict original deadlines. Attempts to extend deadlines and adjust project portfolios are ongoing but require carefully coordinated negotiations within Romania and at the EU level to avert losing substantial EU funding[2][4][5].
- The delays in project implementation are not only impacting the absorption of EU funds in Romania but also putting at risk the loss of over 40% of the allocated RRF funds, equating to a significant sum of EUR 11.9 billion.
- The complexities surrounding politics, business, and finance in Romania, including the unstable political climate, challenging project selection, and strict regulatory barriers, make general-news headlines as they pose significant obstacles to efficient EU funds absorption.
