Commission Report 2002 (Romania)

Community Assistance

Three pre-accession instruments have been financed by the European Community to assist the applicant countries of Central and Eastern Europe with their pre-accession preparations: the Phare programme; SAPARD, which provides aid for agricultural and rural development; and ISPA, which finances infrastructure projects in the fields of environment and transport. The support provided by these programmes is focused on the Accession Partnership priorities which are intended to help the candidate countries meet the criteria for membership.

The level of financial support available under the pre-accession instruments creates a substantial challenge for the Romanian administration. At present, the capacity of the bodies responsible for programming, operational management and financial control is insufficient. For Phare the rate of tendering and contracting in 2001 was significantly lower than the volume of new funds committed during the year. Consequently the backlog of funds not yet contracted has increased. Similar limits of institutional capacity may also affect the implementation of ISPA.

In accordance with the conditionality of the Phare 2001 programme, the Government of Romania produced an assessment of the bodies responsible for the implementation of Phare and ISPA. The assessment, which has been adopted by Government, identified the human and material resources required for management of these programmes during the period 2002 to 2004. Measures to strengthen the capacity of the Central Financing and Contracting Unit in the Ministry of Public Finance and the Financial Unit within the Ministry of Development and Prognosis are particularly urgent.

The Phare programme has been providing support to the countries of Central and Eastern Europe since 1989, helping them through a period of fundamental economic and social transition and political change. Its current ``pre-accession'' focus was established in 1997, in response to the Luxembourg European Council`s launching of the present enlargement process.

Phare provides the applicant countries of Central and Eastern Europe with support for institution building, investment to strengthen the regulatory infrastructure needed to ensure compliance with the acquis, and investment in economic and social cohesion. This support helps these countries with their efforts to adopt the acquis and strengthen the institutions necessary for implementing and enforcing the acquis and comprises of co-financing for technical assistance, ``twinning'' and investment-support projects. Phare also helps the candidate countries develop the mechanisms and institutions that will be needed to implement Structural Funds after accession and is supported by a limited number of measures (investment and grant schemes) with a regional or thematic focus. In the context of the Action Plans for strengthening administrative and judicial capacity, a particular emphasis is placed on the issue of institution building and associated investment intended to ensure compliance with the acquis. For 2002, the Commission has mobilised special financial assistance of up to EUR 250 million to accompany negotiating countries' efforts, over and above the indicative annual allocations for each of the Phare countries, bringing total Community assistance for strengthening the administrative and judicial capacity of the negotiating countries in 2002 to around EUR 1 billion.

During the period 1992-1999, the Phare programme allocated commitments of approximately EUR 1 200 billion to Romania. In 2000 and 2001 the allocations for Romania were EUR 260 million and EUR 287 million. The 2002 Phare National Programme for Romania consists of EUR 229 million, complemented by EUR 36.5 million under the Phare 2002 supplementary institution building facility. The 2002 programme focuses on the following priority areas:

• Strengthening democracy and the rule of law: Phare is providing continuing support for actions in the field of child welfare and is assisting with the implementation of the national strategy to improve Roma conditions (EUR 19 million).
• Economic criteria: support for restructuring the CEC savings bank (EUR 2.5 million).
• Strengthening administrative capacity: support in this area is designed to improve the capacity to manage EC programmes, to strengthen the local public administration, to pursue the institutional development of the Romanian Court of Accounts, to support the implementation of the strategic plan of the Ministry of Public Finance, and to reinforce the implementing bodies for SAPARD (EUR 34 million).
• Meeting the obligations of the acquis: twinning, technical assistance and investment are being provided in the following areas - internal market, competition, customs union, consumer protection, social affairs and employment, agriculture, energy, transport, health, environment and justice and home affairs (EUR 84 million).
• Economic and social cohesion: investment support will be provided for regional development programmes focussing on areas facing particular problems. There are also measures to support economic restructuring and institution building (EUR 107 million).

  An additional EUR 13 million have been allocated for cross border co-operation (CBC) programmes with Bulgaria (EUR 8 million) and Hungary (EUR 5 million).

  Romania also participates in and benefits from Phare funded multi-country and horizontal programmes, such as TAIEX, the Small and Medium-sized Enterprises Facility, SIGMA and the nuclear safety programme.

  Funding provided under Phare 2002 part-finances participation in Community programmes for 2003. Romania remains an active participant in a number of programmes: Leonardo da Vinci, Socrates, Youth, Life III, the multi-annual Programme for Enterprises and Entrepreneurship, Culture 2000 and Framework Programme 5 for Research and Technological Development and Euratom. Romania has expressed an interest in participating in Framework Programme 6 for Research and Technological Development and Euratom. Romania will also participate in the following programmes: Gender Equality, Combating Social Exclusion, Combating Discrimination, Enterprise and Entrepreneurship, Altener, SAVE, IDA II, Fiscalis, European e-content, Customs 2002, Community Action in the field of public health and the Action Programme promoting NGOs in the field of environmental protection. The formal participation of Romania in the European Environment Agency began in January 2002.

  Overall, the impact of Phare has been positive. Effective transfer of know-how, equipment and financial resources has taken place in a number of important fields. In Romania, Phare has played a particularly important role in:

• Building capacity for regional development programmes. Grant schemes have supported local initiatives in tourism and rural development as well as the development of human resources.
• Preparing for implementation of ISPA and SAPARD, through project preparation activities and technical assistance to support development of the necessary administrative structures.
• Initiating activities in the area of human resource development and vocational education and training in line with the priorities of the European Social Fund.
• Supporting improved collaboration between national and local authorities on the implementation of the national strategy for improvement of the situation of the Roma, in particular by allocating funds for 40 local partnership projects through the Resource Centre for Roma Communities.
• Supporting the rehabilitation of two national road sections (DN1 and DN2), which has led to a marked improvement in traffic safety.
• Providing continued support to civil society to develop sustainable partnerships between NGOs and local authorities, and to set up a network of citizens` advice bureaux.
• Supporting the European Initiative for Democracy and Human Rights, aimed at strengthening non-governmental bodies and associations in areas such as: anti-discrimination, conflict resolution, refugee and migrant rights, civic education, human rights promotion, local administration, media, NGO development & training, parliamentary practice and organisation, penal reform and gender equality.
• Supporting the development of modern child welfare services through projects proposed and implemented by local authorities.

The 2000 Phare Review confirmed the accession-driven approach and emphasised the importance of helping countries to prepare for the Structural Funds. The trends introduced in 1997 have continued, with an increased role for Commission Delegations, further streamlining of procedures and an increased emphasis on raising the verifiable and quantifiable impact of Phare projects on institution building, investment in compliance with the acquis and economic and social cohesion.

The Review also provided for the possibility of further decentralisation of Phare management, by waiving the requirement for ex ante approval by the Commission Delegations for tendering and contracting. For this to be possible, strict pre-conditions covering programme management, financial control and structures regarding public finance must be met. An extended decentralised implementation system (EDIS) should be put in place for each negotiating country at the latest by the time of accession. High Level Working Groups are being established for each country to oversee this process, along with other key procedural steps in the run up to accession.

The Commission approved the Romanian SAPARD programme in November 2000. The indicative allocation for SAPARD in Romania for 2002 is EUR 157.9 million at 2002 prices (allocation 2001: EUR 156.3 million at 2001 prices).

The operational programme includes 11 measures and is based on four priorities: improvement of the competitiveness of processed agricultural and fisheries products; improvement of infrastructure for rural development and agriculture; development of rural economy; development of human resources.

The multi-annual Financing Agreement (MAFA), which sets out the rules for implementing SAPARD, and the Annual Financing Agreement (AFA), which sets out the Community financial commitment to Romania for the year 2000, have been in force since January 2002. The AFA 2001 was signed in February 2002. It will enter into force when Romania notifies the Commission of the completion of all requisite national formalities.

The following structures are responsible for the implementation of SAPARD: the National Fund, located within the Ministry of Finance, administers the SAPARD funds under the responsibility of the National Authorising Officer (NAO) and is responsible for the national accreditation of the SAPARD Agency; the Managing Authority is located within the Ministry of European Integration; the SAPARD Agency is located within the Ministry of Agriculture.

In June 2002 the National Act of Accreditation of the SAPARD Agency, along with all relevant documents, was submitted to the Commission. In July 2002, the Commission adopted a Decision provisionally conferring management authority for SAPARD, on a fully decentralised basis, to the SAPARD Agency. This decision includes approval of 3 out of 11 measures of the SAPARD programme and covers 50% of the amount available for Romania.

A Monitoring Committee has been established by the Managing Authority and has met twice.

ISPA programming is governed by the national strategy papers for transport and environment which the Romanian authorities finalised in 2000. The strategy for the environment sector was revised in 2001, to lower the population threshold for water projects from 300 000 to 100 000 inhabitants. Due to a lack of maintenance in the past 20 years, most environmental and transport infrastructure is suffering from serious deterioration. In the case of transport, the emphasis is on upgrading and modernising road and rail links in the trans-European corridors to European standards. Development of waterways is also a priority. As regards the environment sector, Romania faces acute problems concerning air, water and soil pollution requiring large-scale investments from both the public and the private sectors.

For the years 2000 and 2001, the full (mid-range) allocation for Romania has been committed, i.e. EUR 493.2 million (EUR 239.2 million in 2000 and EUR 245.6 million in 2001). The allocation for 2002 will be between EUR 217.8 million and EUR 283.2 million.

Nine environmental projects were approved in 2001: three projects combining investments in the drinking and waste water sectors, in Cluj, Pascani and Targu Mures, with ISPA contributions of EUR 35.1 million, EUR 12.2 million and EUR 20.9 million respectively; five projects focusing on waste water collection and treatment, in Timisoara (ISPA contribution of EUR 334.1 million), Braila (ISPA contribution of EUR 44.9 million), Arad (EUR 13.5 million), Focsani (EUR 11.7 million) and Oradea (EUR 16.7 million); and technical assistance for the preparation of a project for the rehabilitation of the Bucharest waste water treatment plant (EUR 1.4 million). Five transport projects were approved in 2001: three investment projects in the road sector, namely, the rehabilitation of the Craiova-Drobeta road section (EUR 87.8 million), the rehabilitation of the Drobeta-Lugoj road section (EUR 138 million) and the construction of the Sibiu by-pass (EUR 67.9 million); and two technical assistance measures to prepare a project for a rail link with the Hungarian border (EUR 0.6 million) and a project for the rehabilitation of the Craiova-Lugoj road section (EUR 1.1 million). So far in 2002, two measures have been approved in the environment sector: a solid waste project in Ramnicu Valcea (EUR 11 million) and a combined drinking/waste water project for the city of Brasov (EUR 41.7 million). A technical assistance measure to strengthen the capacity of ISPA implementing agencies has also been approved in 2002. Further projects are in preparation.

As regards preparation for extended decentralisation (EDIS), a gap assessment has been carried out. According to the EDIS road map, the Romanian authorities must subscribe to its recommendations in order to proceed with the process.

A number of service contracts have been signed for design, supervision and technical assistance in both the transport and the environment sectors, and three works contracts have been signed in the environment sector and one works contract in the transport sector. Most of the tenders for the remaining ISPA projects approved in 2000 have been launched or are currently in preparation.

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