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KPMG Study: Hit by recession, Romania throws away EU funding opportunities

Romania and the Central and Eastern Europe (CEE) region continue to be affected by the global recession. As the downturn hit these countries later than the U.S. and Western Europe, it is quite likely that there are still some tough months ahead before the recovery begins.

Romania and the CEE countries have suffered a significant reduction in foreign investment since the start of the recession, as investors have moved away from emerging markets in a search for security.

In these circumstances, it is even more important for Romania to take advantage of the large amounts available in EU funding for the 2007-2013 period. Yet the latest issue of the annual survey by KPMG member firms in the region EU Funds in Central and Eastern Europe, indicates that Romania's takeup of EU funds continues to lag behind other CEE countries in many sectors.

As Daniela Nemoianu, Head of Advisory in KPMG in Romania points out; 'The KPMG survey shows that Romania is still behind on transport, energy and technical assistance. The good news is that take-up of R&D and HR development funds has been good. But there is a real need for a consistent improvement on infrastructure related funds. Many investors and business associations like the Foreign Investors' Council (FIC) and the American Chamber of Commerce in Romania (Amcham) have repeatedly pointed out that Romania's poor infrastructure is a serious disincentive to investment. This makes travel and transport across the country slow and dangerous, particularly affecting northern and eastern areas. The railway network has also suffered from years of underinvestment. With an average of only 16% of total EU budget contracted (30% the largest ratio and 3% the lowest) on transport, Romania is facing serious challenges and risk losing these opportunities.'

As Florin Banateanu, EU Funds and Public Sector Director in KPMG in Romania's Advisory Department adds: 'It is true that in many new member states, take-up of EU funds was quite slow after accession, so in this respect, Romania is not untypical. All the new member states have had to face the challenge of developing new administrative structures to manage the funds, and public servants have needed to learn how the funds work. However, Romania is now in its fourth year as an EU member state, and the available funds have a sell-by date- they must be used by 2013. It is essential that all government departments involved in the management of EU funding make a concerted effort to improve performance.'

As Nemoianu mentions: 'EU funds present a unique opportunity for Romania to improve its infrastructure and encourage investment. They should form part of a virtuous spiral of growth. Moreover, in the short term, infrastructure projects will create jobs and provide a welcome boost to the economy, especially to the construction industry, which has been particularly hard hit by the recession. It is essential that the government should make it a top priority to make more effective use of this important source of financing, by far more beneficial to Romania than foreign or bank loans.'

Nemoianu concludes: 'This KPMG publication is a useful work of reference on the types of EU funding available to CEE countries. The document is useful both for government and the relevant authorities as well as for companies interested in developing projects involving EU funds. For more information, readers should contact KPMG in Romania's team of advisors who have expertise on EU funds and the public sector. As our publication shows, we know how to successfully navigate the EU projects implementation process and are ready to help you identify whether opportunities exist to access this important source of financing.'

Sursa: http://www.actmedia.eu

Tags: romania funds opportunities funding kpmg recession

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