Romania and Slovakia could get extra time to spend EU Cohesion Funds if a new European Commission proposal is accepted. The EC has proposed a series of measures to use EU money to tackle the effects of the financial crisis, such as reducing youth unemployment, investing in SMEs and funding infrastructure projects. Included in the proposal is a plan to allow extensions to deadlines for EU funds in Romania and Slovakia.

“The second measure proposed today would give Romania and Slovakia more time to spend Cohesion Policy money. This would allow for better selection and implementation of strategic projects - for example to boost the competitiveness of SMEs and get young people into jobs,” reads the EC statement recently released yesterday.

Effectively accessing EU money has been a long standing problem for Romania with absorption rates struggling to get over 20 percent. There has been some recent improvements and a number of Operational Programmes suspended due to irregularities in administration by the Romanian authorities have restarted. However, Romania could still potentially lose millions of euros through ineffective handling of available financing. The International Monetary Fund, and the financial sector in general, are unanimous in deeming an improvement in the use of EU funding as vital for Romania's growth prospects.

Thus, the extra time suggested by the EC could be something of lifeline for Romania and according to the Commission, the country should seize the opportunity and press ahead with reforms and European backed projects. “As for Romania and Slovakia, following on the European Council decisions, this proposal gives them an opportunity to invest EU funds where they are most needed. The two countries should see this as an incentive to strengthen their reform and investment efforts,” said Commissioner for Employment, Social Affairs and Inclusion László Andor.

Romania received EUR 12 billion in pre- and post-accession funds. However, the absorption rate of EU Structural and Cohesion Funds, which account for some 60 percent of the total EUR 33.5 billion allocation, was only 12 percent.

Romania last year absorbed EUR 1.2 billion euros, up from EUR 700 million in 2011. The new government has made improving the EU absorption rate a priority and the issue is a perennial topic of discussion with EU officials.

editor@romania-insider.com

(photo source: sxc.hu)